Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Medical Debt topic
No spam. Unsubscribe anytime.
Senate committee reviews S.27 to fund medical-debt abolition, bar medical debt from credit reports and add behavioral-health definition
Summary
S.27 would appropriate $1 million to the treasurer to contract with a nonprofit to buy and abolish eligible medical debt, require notice to individuals whose debt was canceled, and add a Title 1 definition of "behavioral health" that excludes mental health conditions and substance use disorders for the statute's purposes.
The Senate Health & Welfare Committee reviewed S.27, a bill returned from the House that would authorize a $1 million appropriation to the state treasurer to contract with a nonprofit entity to purchase and abolish certain medical debt and bar credit reporting agencies from including medical debt information in consumer files.
Jen Harvey, counsel in the Office of Legislative Counsel, summarized the House amendments and the bill's mechanics. The bill would appropriate $1 million from the general fund in fiscal year 2026 for the treasurer to contract with a nonprofit that would acquire eligible medical debt from health care providers at fair market value and abolish it "with no cost or tax consequences to the debtor," then coordinate with providers or collection agencies to remove related items from consumer credit reports.
Harvey said the bill's eligibility remains unchanged: individuals with household income at or below 400% of the federal poverty level may qualify for debt abolition. The House added a consumer-notification requirement: the contracting entity must notify each person whose medical debt was abolished about the amount canceled, the name(s) of the provider(s) whose debt was purchased, and the individual's estimated percentage of the federal poverty level so the person understands whether existing patient financial assistance policies might apply.
Committee members discussed that the notice should also explain statutory financial-assistance minima already on the books. Harvey referenced the existing law's discount schedule, noting the statute provides minimum discounts for hospital financial-assistance policies and that the bill would inform affected consumers of those discounts; the transcript records a specific reference to a minimum 40% discount for households between 250% and 400% of the federal poverty level and states the bill ties eligibility to the 400% threshold.
S.27 also adds a Title 1 definition of "behavioral health" for the limited purpose of avoiding ambiguity in statutes that use the term. The added definition reads in part that "behavioral health" means any behavioral condition bearing on health and that, as used in the Vermont Statutes Annotated for this purpose, the term does not include mental health conditions or substance use disorders. Committee members discussed the potential stigma associated with the term and the legislation's effort to limit that meaning where appropriate.
Other technical clarifications in the House amendment clarified which tax-exempt organizations may access credit-report information for determining eligibility for debt abolition and explicitly excluded large health care facilities (hospitals and ambulatory surgical centers) from a permissive exemption that would otherwise allow tax-exempt organizations to access credit-report data without consent.
A senator said they would consult with the House partner on one outstanding question and staff indicated the committee would aim to present the bill on the floor; no formal committee vote appears in the transcript provided.
