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Maryland lawmakers hear competing medical-debt purchase bills aimed at cancelling patient balances
Summary
Delegates heard two bills that would authorize third parties — local governments or nonprofits — to buy and forgive medical debt, with sponsors citing the DC precedent and advocates urging flexibility; lawmakers pressed authors about consumer protections and fiscal impacts.
The House Health and Government Operations Committee heard two related bills that would allow the purchase and cancellation of medical debt: House Bill 7 65, which would let local governments buy patient medical debt, and House Bill 13 24, which would let nonprofit organizations buy and cancel medical debt. Sponsors and witnesses told the committee that large swaths of Maryland households carry medical obligations that can derail credit and economic opportunity.
Delegate Ivy introduced HB 7 65 as a local-government option, describing the measure as a tool counties and municipalities could use when discretionary funds are available. Delegate Ryan Spiegel presented HB 13 24 and said his bill narrows the approach to nonprofit buyers to avoid regulatory and budgetary complications he expects with broader proposals.
Witnesses pointed to recent work in Washington, D.C., as a model. Jennifer Holloway of Zedek DC said the District appropriated $900,000 and that a nonprofit partnership led to the cancellation of nearly $42,000,000 in medical debt for about 62,000 residents; she also said faith-based private fundraising contributed to roughly $8,000,000 in additional cancellations. Committee members asked whether nonprofit groups can raise enough funds and whether purchases would reliably wipe consumer obligations and prevent future credit impacts.
Spiegel said his bill would allow sales only to nonprofit organizations “for the sole purpose of canceling that debt,” and that it intentionally omits state or local government purchasers to keep the measure narrow. Delegate Ivy said his local-government option is not mandatory and stressed consumer protections for privacy and credit reporting; he said municipalities would not be required to use the power if funds were scarce.
Several committee members pressed sponsors on eligibility rules, whether liens or accounts already in collections would be cleared, and on coordination with hospital industry groups. Both sponsors told the panel they had worked with the Health Services Cost Review Commission (HSCRC) and others while drafting their proposals and that they were willing to combine ideas where helpful.
No formal votes were taken. The bills advanced only as part of the day’s hearings; committee members and staff indicated they expect follow‑up amendments to address concerns about consumer safeguards and administrative details.
Ending: Committee members asked staff to circulate technical language; sponsors said they are open to amendments to tighten consumer protections and to address fiscal and administrative questions from HSCRC and the committee.
