House advances S.27 to buy and abolish qualifying medical debt, bars reporting to credit agencies

MONTPELIER — The Vermont House on the floor advanced Senate Bill 27, a bill to fund purchase-and-abolition of qualifying medical debt and to prohibit certain medical-debt reporting to consumer credit agencies, approving committee-recommended amendments and adopting two additional amendments clarifying covered services and the limited statutory use of the term “behavioral health.”

The measure includes a $1,000,000 one-time appropriation to the state treasurer for fiscal year 2026 to contract with a nonprofit that would acquire and abolish medical debt for eligible Vermont residents, the House Health Care Committee reported. Representative Page (member from Newport City), speaking for that committee, said the contractor would “purchase the medical debt from eligible debtors, abolish the debt with no cost or tax consequences for the debtor, [and] coordinate with health care providers or collection agencies to ensure that no information from the debt removal is applied to the debtor’s consumer credit report.”

The bill’s supporters told the chamber that medical debt is widespread and often arises from necessary care. Representative Page quoted the health care advocate: “the debt is not caused by individuals having a good time. It was not a mistake with one’s financials by overextending. The debt occurred simply by individuals getting sick.” Page also quoted the state treasurer as saying “1 in 10 Vermonters have medical debt.”

Why it matters: the bill aims both to remove specific debts from individuals’ obligations and to block reporting of that medical debt to credit reporting agencies —…