Holland Reporter

A bipartisan group of Michigan lawmakers has introduced legislation aimed at protecting families from aggressive medical debt collection practices. State Rep. Angela Rigas, along with Rep. Laurie Pohutsky and state Senators Sarah Anthony and Jonathan Lindsey, are sponsoring the measures in both chambers of the Michigan Legislature.

The proposed bills would cap interest on medical debt, restrict extraordinary collection actions, and define violations as unfair trade practices under the Michigan Consumer Protection Act.

“Medical debt affects millions of Michiganders, often leading to bankruptcy, denied care, or ruined credit. By curbing predatory practices, we can ease burdens on working families without undue strain on providers,” said Rigas. “People who are paying their debt should not be living in fear of foreclosure or bankruptcy.”

Senator Lindsey added: “It is imperative that we address the out-of-control cost of healthcare. But until that happens, we must also confront the stark reality that too many Michiganders are failed by the current system and saddled with extraordinary medical debt.”

One bill—sponsored by Rigas (HB 5254) and Lindsey—would make violations of a new Medical Debt Protection Act an unfair practice in trade or commerce. This change would allow the Attorney General to enforce medical debt safeguards using existing consumer protection laws.

Rep. Pohutsky explained: “Health care continues to be unaffordable for millions of Americans. Michiganders are shouldering mountains of medical debt, which remains the leading cause of bankruptcy. We need to take the necessary steps now to protect Michiganders from the harms of medical debt. This bill will place caps on fees, prohibit extreme collection actions, restrict and properly regulate the sale of medical debt and require that any overpayments are refunded within 60 days. These are critical first steps to address the medical debt crisis and ensure access to affordable health care for every Michigander.”

The second bill—sponsored by Anthony and Pohutsky (HB 5255)—sets detailed protections for patients dealing with medical debts:

- Large healthcare facilities and buyers could not charge interest or late fees until 90 days after a final invoice due date; a strict 3% annual cap would apply thereafter.

- Aggressive actions such as arrests, foreclosures on real property, personal property liens, or wage garnishment would be prohibited for those qualifying for financial assistance.

- Any aggressive action like credit reporting or lawsuits would be deferred until 120 days after an invoice is issued; patients must receive at least 30 days’ advance notice including information about financial assistance.

- Medical creditors could only sell debts under agreements requiring buyers to follow these same rules; sellers remain liable if buyers violate them.

- Overpayments must be refunded within 60 days; collection policies must disclose possible actions upfront.

Senator Anthony stated: “For too many Michigan families, one trip to the emergency room can lead to months or even years of financial hardship — even for those who are fortunate enough to have health insurance. This reality is unacceptable. Plain and simple. As we see a concerted attack on health care access coming from Washington, the number of Michiganders shouldering medical debt will only continue to grow. It’s up to us at the state-level to provide an additional line of defense, and this practical, proactive legislation will help us ensure families are not condemned to a cycle of poverty simply for seeking necessary health care.”

The bills require mutual enactment in both chambers before taking effect.