The exchange for the debt economy
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- Michigan Senators approved two bill packages Wednesday limiting how and when hospitals and debt collectors can go after unpaid bills
- Gov. Gretchen Whitmer called for passing the policies as part of her final State of the State address in February
- All five bills now move over to the state House, where they await further consideration
Michigan’s Senate just passed a bipartisan package that would sharply limit interest, fees, and collection tools on medical debt, and now it heads to the House for consideration.
Core elements of the Senate plan
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No interest or late fees for 90 days after the final medical bill is issued.
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After 90 days, interest and late fees on medical debt are capped at 3% per year for large health care facilities and medical debt buyers.
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Hospitals and medical debt collectors would be barred from “extraordinary collection actions” such as arrest, wage garnishment, or foreclosure over unpaid medical bills.
Additional protections in the bills
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Hospitals could not defer, deny, or require full payment of existing medical debt before providing urgent services.
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Hospitals would have to refund overpayments within 60 days after financial assistance is applied if a patient paid more than was actually owed.
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A new Hospital Financial Assistance Act would require hospitals to establish and clearly publicize income-based financial assistance programs starting in 2027, and file annual reports with the state health department; noncompliant hospitals could face fines and fees.
Credit reporting changes
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A separate bill (SB 451) would prohibit consumer reporting agencies from including medical debt information in credit reports.
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Medical creditors and collectors would also be barred from communicating or reporting medical debt information to consumer reporting agencies.
Status and politics
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Key bills in the package include SB 701 and SB 702 (interest and collection limits) and SB 449–451 (financial assistance and credit reporting rules).
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The Senate approved the package on strongly bipartisan votes (for example, SB 449 and 450 passed 33–2, and SB 451 passed 27–8) and sent it to the House.
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House Speaker Matt Hall has not committed to a vote, calling the Senate package “incomplete” and tying it to hospital price transparency and licensure compact issues, so final passage is uncertain.
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