The civic record
Read. Follow. Verify.Vermont allocates $1 million to buy and forgive medical debt and bans credit reporting of medical collections
Last action · January 28, 2025: Read first time and referred to the Committee on Health CareSponsors: Alyssa Black and 52 others
Track this bill to get notified when it advances a stage. One tap to stop, anytime.
What This Bill Would Do
Vermont lawmakers propose dedicating $1 million to the State Treasurer to hire a nonprofit that will purchase and forgive medical debt for lower-income residents, while banning credit reporting agencies and large health care facilities from sharing medical debt information. If enacted, the rules take effect July 1, 2025.
Residents meeting specific low-income thresholds or owing high medical debt relative to household income could have their medical collections erased without tax consequences, and no Vermont consumer will have medical debt appear on their credit reports.
- State legislatures increasingly consider measures to alleviate consumer medical debt burdens and restrict credit reporting agencies from including medical collections in credit scores. context
- The State Treasurer in Vermont manages state funds, cash management, and bonding operations. context
Who It Would Affect
Groups the bill's text would affect if enacted, as described in the record. Being affected is not a position for or against it.
Vermont residents with qualifying medical debt
Eligible residents may have their outstanding medical debts purchased and abolished without tax consequences and have adverse credit report entries removed.
Credit reporting agencies
Credit reporting agencies are prohibited from reporting, maintaining, or including consumer medical debt information in credit files.
Large health care facilities
Large health care facilities are prohibited from selling medical debt to entities other than tax-exempt 501(c)(3) organizations for debt cancellation and cannot report medical debt to credit agencies.
State Treasurer
The State Treasurer receives a $1,000,000 appropriation to contract with a nonprofit entity to acquire and repay qualifying medical debts.
Key Facts
- The sum of $1,000,000.00 is appropriated from the General Fund in fiscal year 2026 to the State Treasurer to contract with a nonprofit entity for acquiring and repaying certain medical debts.
- Eligible debtors must be Vermont residents with household incomes at or below 400 percent of the federal poverty level, or owe medical debt equal to five percent or more of their household income.
- Debts must maintain an outstanding balance after the health care provider has completed routine collection efforts.
- The contracting entity must purchase debt at fair market value, abolish it with no cost or tax consequences, and ensure adverse information is removed from consumer credit reports.
Show all 10 facts
- Credit reporting agencies are prohibited from reporting or maintaining information relating to a consumer's medical debt.
- Large health care facilities are prohibited from selling medical debt except to a 501(c)(3) organization specifically for canceling the indebtedness.
- Large health care facilities and medical debt collectors are prohibited from furnishing medical debt information to credit reporting agencies.
- Tax-exempt 501(c)(3) organizations are permitted to access consumer credit reports for the purpose of determining eligibility for medical debt abolition.
- An existing appropriation of $20,000,000 to the State Treasurer's Office for redeeming general obligation bonds is amended to $19,000,000.
- The act takes effect on July 1, 2025.
Frequently Asked Questions
Who qualifies to have their medical debt forgiven under this bill?
Will forgiven medical debt count as taxable income for the resident?
Can health care providers continue to report medical debt to credit bureaus?
What else do you want to know?
News Coverage
Follow the record
Votes, people, money & the original sourceWhere This Stands
Currently in committee. The next step in the legislative lifecycle is Floor Vote.
Procedural history
1 action- Jan 28, 2025HouseIntroducedRead first time and referred to the Committee on Health Care
Version history
Only one version on file - nothing to compare yet. As later stages (committee substitute, engrossed, enrolled) are captured, the redline appears here.
View official text →Lobbying Activity
No state lobbying filings in our records match this bill. Federal lobbying reports (LDA) cover Congress, so they are not listed on state bills.
Full breakdown
Who this bill affects and the strongest case for and against it, written only from the bill’s own text.
Sponsors
Show 48 more sponsors
Discoveries
Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.
Bond Redemption Funds Reallocated
The bill amends a prior 2022 appropriation by reducing the amount set aside for redeeming state general obligation bonds from $20,000,000 to $19,000,000, adjusting state capital allocations.
Connected Entities
Sources
legislature.vermont.gov
Analysis Score
0–100- Significance75How much this matters to a regular citizen
- Controversy45Intensity of disagreement among stakeholders
- Entertainment10Compellingness for a non-policy-wonk reader
- Buzz60Current news / social attention level
Publisher tools