Indiana Lawmakers Continue Bipartisan Medical Debt Debate

Indiana legislators are debating several bipartisan bills in the 2026 session that would curb aggressive collection of medical debt, limit wage garnishment and home liens, and require hospitals to offer clearer payment plans and financial assistance information.

What lawmakers are debating

• Senate Bill 85 (SB 85) would require hospitals to offer payment plans to low‑ and moderate‑income patients, limit how much of a person’s wages can be garnished for medical bills, and prohibit liens on primary residences for qualifying patients’ medical debt.

• Related House and Senate measures (including HB 1050, HB 1051, and HB 1271) would bar or restrict liens on homes for medical debt, exclude medical debt from some credit scoring uses, and force hospitals to notify patients about charity care or payment‑assistance options before sending bills to collections.

• Sen. Fady Qaddoura’s broader medical debt agenda also includes a bill to stop wage garnishment and property liens against low‑income families’ primary homes and to mandate “meaningful” payment plans and financial assistance for medically necessary care.

Why this is bipartisan and contentious

• Indiana has more than 2 billion dollars in medical debt in collections, with about one in five Hoosiers carrying medical debt, which has pushed lawmakers in both parties to acknowledge the problem and work on protections.

• Sponsors describe the current negotiations as a search for a “sweet spot” that protects patients from losing wages and homes without completely separating medical debt from existing garnishment law, which has led to compromises such as scaling back earlier proposals that would have fully banned wage garnishment and liens.

Current status and public pressure

• The 2026 session resumed in early January, and these medical‑debt bills are moving through committees with active negotiations over details like garnishment limits and eligibility thresholds.

• Advocacy groups such as Hoosier Action and the Indiana Community Action Poverty Institute are holding Statehouse rallies and “Healthcare Day of Action” events, urging lawmakers to pass SB 85, HB 1271, and related bills and arguing that medical debt is driving financial instability across the state.​

Key protections being discussed (illustration)

• Caps on monthly payments (for example, tying them to a percentage of household income over a set number of months).

• Limits on wage garnishment and strong restrictions or bans on liens against a primary residence for medical debt.

• Requirements for hospitals to clearly inform patients about charity care and financial assistance before collections begin, and to offer reasonable payment plans for medically necessary procedures.