Senate Bill 1347, introduced in the Minnesota State Legislature on February 13, 2025, aims to address the growing issue of medical debt among residents by modifying the definition of "debt buyer" and appropriating funds for medical debt relief. The bill seeks to provide financial assistance to individuals burdened by medical bills that remain unpaid after reasonable collection efforts by hospitals.

One of the key provisions of the bill is the appropriation of $5 million from the general fund for the fiscal year 2026. This funding is designated for a grant to the organization Undue Medical Debt, which will work to relieve medical debt for eligible residents. The bill specifies that this is a one-time appropriation, available until June 30, 2028, and requires Undue Medical Debt to report on the demographics and characteristics of those receiving assistance.

The bill also modifies the existing definition of "debt buyer" in Minnesota Statutes, clarifying that it refers to businesses that purchase charged-off accounts for collection purposes. Notably, it excludes nonprofit organizations that acquire such debts for charitable reasons.

Debate surrounding Senate Bill 1347 has focused on the implications of medical debt on individuals and families, particularly in light of rising healthcare costs. Supporters argue that the bill is a necessary step toward alleviating financial burdens on vulnerable populations, while opponents express concerns about the potential for increased costs to hospitals and the implications for the healthcare system.

The economic implications of the bill could be significant, as it aims to provide relief to residents who may otherwise face bankruptcy or financial instability due to medical debt. Experts suggest that by addressing this issue, the bill could lead to improved financial health for many families and reduce the overall burden on the healthcare system.

As the bill moves through the legislative process, its future will depend on ongoing discussions and potential amendments. If passed, Senate Bill 1347 could serve as a model for other states grappling with similar challenges related to medical debt and consumer protection.