On March 11, 2025, the Maryland Legislature introduced Senate Bill 981, a significant piece of legislation aimed at reforming hospital billing practices and enhancing patient protections regarding medical debt. The bill seeks to address the growing concern over financial burdens faced by patients due to high medical costs and the aggressive collection practices often employed by healthcare facilities.

The primary provisions of Senate Bill 981 include a cap on patient payments, which cannot exceed 5% of a household's adjusted gross monthly income. This measure is designed to ensure that medical expenses remain manageable for families. Additionally, the bill mandates that hospitals consider financial hardship when determining payment plans and prohibits interest charges for patients qualifying for free or reduced-cost care. Notably, the bill also establishes guidelines for payment plans that do not impose additional financial strain on patients and prohibits penalties for early payment.

A key aspect of the legislation is the requirement that hospitals cannot initiate legal action against patients for unpaid debts until they have implemented a compliant payment plan policy. This provision aims to protect patients from aggressive collection tactics and ensure that they are given a fair opportunity to manage their medical bills.

During discussions surrounding the bill, there were notable debates regarding the balance between protecting patients and the financial viability of healthcare providers. Some lawmakers expressed concerns that stringent regulations might impact hospitals' revenue streams, potentially leading to increased costs for all patients. However, advocates for the bill argue that the current system disproportionately affects low-income individuals and that reform is necessary to promote equitable access to healthcare.

The implications of Senate Bill 981 are significant, as it addresses both economic and social issues related to healthcare access. Experts suggest that by alleviating the financial burden on patients, the bill could lead to improved health outcomes and reduce the number of individuals delaying necessary medical care due to cost concerns.

As the legislative process continues, stakeholders from various sectors, including healthcare providers, patient advocacy groups, and lawmakers, will closely monitor the bill's progress. The outcome of Senate Bill 981 could set a precedent for how medical debt is managed in Maryland and potentially influence similar legislation in other states.