House Bill 1324, introduced in Maryland on February 10, 2025, aims to address the growing issue of medical debt by facilitating the sale of such debt to nonprofit organizations for the sole purpose of cancellation. This legislative effort seeks to alleviate the financial burden on patients who often find themselves overwhelmed by medical expenses, particularly those who are uninsured or underinsured.

The bill outlines specific provisions that govern the sale of medical debt. Notably, it mandates that any contract between hospitals and nonprofit organizations must explicitly state that the debt's sole purpose is to be canceled. Additionally, patients must provide written consent for their debt to be sold, ensuring that they are not held responsible for any amounts associated with the sold debt, including interest or fees. This provision is particularly significant as it protects patients from further financial strain.

Another key aspect of House Bill 1324 is its approach to existing legal limitations on debt sales. The bill allows for the sale of medical debt without being hindered by current liens, legal processes, or pending appeals with insurance companies. This flexibility is intended to streamline the process and encourage more nonprofit organizations to participate in debt cancellation efforts.

The implications of this bill are substantial. By enabling the cancellation of medical debt, it could lead to improved financial stability for many Maryland residents, potentially reducing the number of individuals facing bankruptcy due to healthcare costs. Moreover, the bill requires the Maryland Health Care Commission to review hospitals' compliance with these new policies and to compile an annual report on medical debt collection practices, which will be made publicly available. This transparency aims to hold hospitals accountable and ensure that they are not contributing to the cycle of medical debt.

While the bill has garnered support from various advocacy groups focused on healthcare affordability, it may face opposition from some healthcare providers concerned about the financial implications of debt cancellation. Experts suggest that the success of House Bill 1324 could set a precedent for similar legislation in other states, potentially reshaping how medical debt is managed nationwide.

As Maryland moves forward with this legislation, the community will be watching closely to see how it impacts residents' financial health and the broader healthcare landscape. The bill represents a significant step toward addressing the pervasive issue of medical debt, with the potential for lasting benefits for many families across the state.