In this brief, we draw on in-depth interviews with key stakeholders to assess early experiences with state medical debt protection laws enacted since 2020 in four states: Colorado, Illinois, Maryland, and New Mexico. The new protections in these states build on federal law in various ways and represent some of the most comprehensive approaches taken in recent years to bolster regulation of hospital financial assistance and debt collection actions.

WHY THIS MATTERS

Millions of Americans struggle with medical debt, jeopardizing their financial security, access to health care, and well-being. Though the prevalence of medical debt has declined as more people gained health insurance coverage under the Affordable Care Act, its persistence has triggered some states to enact new consumer protection laws or strengthen existing protections. These policies generally set minimum standards for hospital financial assistance programs, streamline screening and application processes for assistance, and restrict certain debt collection practices. However, little is known about how well these laws are working to protect consumers. We examine issues and challenges with implementation and initial perspectives on whether the laws are meeting their goals.

WHAT WE FOUND

Implementation

• Though states have made efforts to standardize screenings and applications for hospital financial assistance, patients continue to face barriers to accessing it, including limited awareness, insufficient language assistance, and complex intersections with health insurance.
• State rulemaking requires sustained engagement of key stakeholders.
• Hospitals must reorganize administrative processes and train staff to implement new screening and application procedures.

Enforcement and Reporting

• The capacity and authority of state oversight agencies are key factors in enforcement.
• It is too early to assess how well a private right of action complements state efforts to ensure compliance.
• States require hospitals to report granular patient-level data on financial assistance and debt collection, but challenges in implementing the requirements have delayed data availability.

Early Evidence

• Though early evidence of the effect of state medical debt laws is limited, hospitals in several states report changing their billing and collection practices and increasing financial assistance to patients.

HOW WE DID IT

We conducted a comprehensive review of research literature and documents on state medical debt protection policies, including legislation, regulatory guidance, and public reports. We then conducted 16 semi-structured interviews between September 2023 and January 2024 with national experts and state-level representatives of consumer advocacy organizations, hospital associations, health care providers, and government agencies in the four study states that recently implemented robust medical debt laws.