Committee approves amendment to S.27 to fund medical-debt buyouts and narrow credit-reporting ban

A Senate Health & Welfare committee on Feb. 28 approved an amendment to S.27 that allocates $1,000,000 to the state treasurer to contract with a nonprofit to acquire and repay certain medical debts and replaces the bill’s original credit-reporting prohibition with a new, narrower definition of medical debt.

Committee counsel Jen Kirby of the Office of Legislative Counsel summarized the amendment as a one-section replacement of the bill’s reporting language and walked members through the new definition. Kirby said the appropriation is “a million dollars to the treasurer to contract with a nonprofit entity to acquire and repay certain medical debts incurred by Vermont residents, who either have a household income at or below 400% of the federal poverty level or owe medical debt that is 5% or more of their total household income.”

The amendment replaces the bill’s prior reliance on the patient financial assistance statutory definition with a freshly negotiated definition, proposed by the treasurer’s office and informed by other states. Under the new language, “medical debt” means a debt arising from health care services — including dental services — or health care goods such as durable medical equipment and prescription drugs. The definition explicitly excludes debt from veterinary services and general-purpose credit-card charges unless the card is issued solely for payment of health care services; it also excludes home-equity or other secured debt.

Kristelia (identified during the meeting as the president of the Vermont Bankers Association) told the committee the amended language reflected consensus reached with the treasurer’s office and other stakeholders. Arnie Davis of the Leukemia & Lymphoma Society said the language was modeled on provisions Maine used and that he considered it “a good and fair compromise.”

Committee members discussed administration of the program; Kirby said the treasurer has discussed working with a nonprofit such as Unbound Medical Debt to administer the purchase and forgiveness process, and that the treasurer’s office would retain oversight while contracting administration to the nonprofit.

Senator Cummings moved to amend S.27 with the draft presented as 1.1 (dated in the record). The motion was seconded and the committee called the roll. Senators Hart, Cummings, Douglas, Gold and Lyons each recorded “yes” on the amendment; the clerk reported the tally as five affirmative votes. The committee then voted to report the bill — as amended — to the full Senate.

The committee chair and counsel noted the bill will proceed to the Senate Finance Committee for further consideration of fiscal impacts and appropriations language.

Ending: The committee agreed to send S.27, as amended, to the full Senate for further consideration; members also referenced an upcoming webinar hosted by the treasurer’s office and partners to explain the program and its administration.