There is no federal law called the “Medical Debt Forgiveness Act.”
The term is widely used to describe several proposed bills and policy initiatives aimed at reducing or eliminating medical debt — but none have been signed into law.
As of 2026, multiple federal proposals remain pending in Congress, a major CFPB rule was vacated by a federal court, and the most meaningful medical debt protections exist at the state level.
The confusion is understandable.
Media coverage often treats proposed legislation as if it were already enacted, and the names of different bills blur together.
The sections ahead separate what actually passed from what is still proposed — and explain what each development means for healthcare providers and patients. Let’s go through:
- Current medical debt credit reporting rules in 2026
- What happened to the CFPB medical debt credit reporting rule
- Which federal medical debt bills are pending and which passed
- What healthcare providers need to do for compliance
- State-level protections that are already in effect
Has a federal medical debt forgiveness act passed?
No. As of 2026, no federal legislation titled “Medical Debt Forgiveness Act” has been signed into law.
The bills that most people associate with this phrase are still working through Congress. Let’s look at the current status of each major federal initiative.
Federal Medical Debt Legislation Status
What passed, what’s pending, what failed
No Surprises Act
Enacted 2020, effective Jan 2022. Limits surprise out-of-network billing.
Medical Debt Relief Act of 2025
Pending. Would remove medical debt from credit reports.
Medical Debt Cancellation Act
Pending. Would fund federal medical debt elimination.
CFPB Medical Debt Credit Rule
Vacated by federal court, July 2025. No longer in effect.
Only the No Surprises Act is currently federal law — everything else is proposed or struck down
Approximately 100 million Americans owe more than $220 billion in medical debt, making this one of the largest consumer-finance policy issues in the country. The legislative pressure is real, but the legal landscape is still developing.
Which federal medical debt bills are currently pending?
Two major federal proposals are working through Congress. Neither has been enacted, but both would significantly change medical debt rules if signed into law.
Medical Debt Relief Act
The Medical Debt Relief Act of 2025 (S.2519 / H.R.4827) was introduced in July 2025. If enacted, it would amend the Fair Credit Reporting Act to prohibit credit bureaus from including medical debt on consumer credit reports and prevent lenders from using medical debt information when evaluating loans.
The bill’s core provisions include the following.
- Prohibiting medical debt from appearing on consumer credit reports
- Preventing medical debt from affecting credit scores
- Directing the CFPB to enforce these protections
Current status — referred to committee in both chambers, not voted on.
Medical Debt Cancellation Act
The Medical Debt Cancellation Act (H.R.8311) was introduced by Rep. Ro Khanna during the 118th Congress. Unlike the Relief Act, which focuses on credit reporting, the Cancellation Act would fund actual debt elimination through federal grants to hospitals.
The bill’s core provisions include the following.
- Elimination of qualifying patient payment obligations
- Requirements for hospitals to screen patients for financial assistance eligibility
- Federal grants administered through HHS to purchase and cancel hospital-held medical debt
Current status — referred to committee, not advanced beyond initial review.
The two proposals address different problems. The Relief Act protects credit scores. The Cancellation Act eliminates debt balances. Neither is law.
What happened to the CFPB medical debt rule?
In January 2025, the Consumer Financial Protection Bureau finalized a rule that would have removed approximately $49 billion in medical debt from the credit reports of roughly 15 million Americans.
The rule was challenged in court, and in July 2025, a federal court vacated it. The CFPB rule is no longer in effect.
For healthcare providers and billing teams, the practical impact is that medical debt can still appear on credit reports under current federal rules.
The voluntary changes that the three major credit bureaus made in 2022–2023 (removing paid medical collections, extending reporting wait periods, and excluding debts under $500) remain in place as industry policy rather than legal mandate — but those bureau policies could change.
What are the current medical debt credit reporting rules in 2026?
The current medical debt credit reporting rules are a patchwork of voluntary industry practices and state laws — not a single federal standard. Knowing the difference between what’s required and what’s voluntary is critical for providers managing collection workflows.
- Medical debt reporting is delayed at least one year after collections
- Several states impose broader bans on medical debt credit reporting
- Medical debt under $500 is generally not reported (credit bureau voluntary policy, not law)
- Paid medical collections are generally removed from credit reports (credit bureau voluntary policy)
For providers, the most important compliance consideration is verifying whether your state has enacted medical debt reporting restrictions before sending accounts to collections. State laws override bureau voluntary policies and carry legal consequences for violations.
Which states have passed their own medical debt protections?
The strongest medical debt protections in 2026 exist at the state level. Several states have moved ahead of Congress with laws that directly restrict medical debt reporting, limit collection activity, or expand financial assistance requirements.
| State | Protection | Effective |
| California | Banned medical debt credit reporting; expanded financial assistance requirements; surprise billing protections (AB 72, AB 716) | Various dates, 2017–2025 |
| Colorado | Restricted medical debt reporting on credit reports | 2023 |
| Connecticut | Medical debt protections and financial assistance requirements | Recent |
| Michigan | Bipartisan medical debt protection bill passed state Senate 35-0 | 2026 (pending House) |
California has the most extensive protections. State law restricts consumer reporting agencies from including medical debt on credit reports and requires hospitals to provide financial assistance to patients meeting income-based eligibility criteria.
However, the specific consequences of violating these provisions depend on the exact statutory language — providers should consult the relevant California statutes and legal counsel before assuming any particular outcome.
Cook County, Illinois demonstrated a different model — purchasing $1.5 billion in medical debt portfolios at steep discounts and canceling the obligations entirely, without requiring federal legislation. Other local governments are exploring similar debt-acquisition programs.
What does medical debt forgiveness vs. relief vs. settlement actually mean?
Searchers frequently conflate three distinct concepts. The differences affect what patients can expect and what providers need to prepare for.
Know the difference
Forgiveness vs. relief vs. settlement
Debt forgiveness
Debt is fully cancelled
Patient owes nothing
Usually through charity care, hospital programs, or government debt-purchase programs
Example — Cook County $1.5B program
Debt relief
Debt may still legally exist
Credit report protections applied
Collection restrictions or payment plan reforms
Example — Medical Debt Relief Act of 2025
Debt settlement
Debt reduced through negotiation
Patient pays a portion
Agreement between patient and provider or collection agency
Example — $12,000 bill settled for $4,000
Most current federal proposals are debt relief (credit protection), not debt forgiveness (cancellation)
For providers, the operational difference is significant. Debt forgiveness programs (like hospital charity care or government debt-purchase initiatives) eliminate the balance entirely — the revenue is gone.
Debt relief laws (like credit reporting restrictions) do not erase the debt itself, but they change how it can be reported and collected. Settlement is a negotiated reduction that recovers partial revenue.
What should healthcare providers do right now?
The medical debt legislative landscape is shifting, and providers who wait for a single federal law to clarify everything will fall behind. The practical compliance steps for 2026 follow a clear sequence.
For practices operating in California or other states with strong medical debt protections, compliance is not optional — and the penalties for violations can be severe. State-specific legal review is the only reliable way to confirm your collection and reporting practices are current.
Navigate the shifting rules before they catch up to you
Medical debt legislation is moving fast at the state level even while federal proposals stall. Whether your practice needs to update collection workflows, verify state-specific credit reporting restrictions, or build compliant financial assistance screening into your intake process, the compliance window is now — not after the next bill passes.
- Collection compliance aligned with current state and federal rules
- Good Faith Estimate and No Surprises Act workflows
- Patient financial assistance screening and documentation
- Revenue cycle adjustments for evolving medical debt regulations
MedHeave helps healthcare practices stay compliant with medical debt laws while protecting collectible revenue — contact us before the rules change again.
Frequently asked questions
Questions below address the top search queries and remaining gaps.
No. The Medical Debt Relief Act of 2025 (S.2519 / H.R.4827) was introduced in July 2025 and referred to committee in both chambers. It has not been voted on, and it is not law. If enacted, it would prohibit credit bureaus from including medical debt on consumer credit reports and prevent lenders from using medical debt in loan evaluations. The earlier Medical Debt Relief Act of 2023 (H.R. 6003) was also introduced and referred to committee but never advanced.
There is no single new federal law governing medical bills on credit reports as of 2026. The CFPB finalized a rule in January 2025 that would have removed medical debt from credit reports, but a federal court vacated that rule in July 2025. The current credit reporting landscape is governed by voluntary credit bureau policies (removing paid medical collections, excluding debts under $500, and waiting one year before reporting) plus state-specific laws in states like California and Colorado that restrict or ban medical debt reporting.
For patients, the most effective medical debt relief options in 2026 include requesting an itemized bill and reviewing it for errors, appealing insurance denials that created the debt, applying for hospital charity care or financial assistance programs, negotiating a reduced balance or payment plan directly with the provider, and checking whether your state has enacted medical debt protections (credit reporting bans, collection restrictions, or financial assistance requirements). For patients with income below 400% of the federal poverty level, many hospitals are required by state law to provide income-based discounts — but eligibility thresholds and discount amounts vary by state and facility.
The No Surprises Act (enacted 2020, effective January 2022) protects patients from certain surprise medical bills — specifically balance billing from out-of-network providers at in-network facilities, out-of-network emergency services, and air ambulance services. It limits patient responsibility to in-network cost-sharing amounts in those situations and requires providers to give Good Faith Estimates to uninsured or self-pay patients. However, the No Surprises Act does not forgive existing medical debt, remove medical debt from credit reports, or apply to ground ambulance services (a known gap in the law).
Yes, under current federal rules. The CFPB rule that would have banned medical debt from credit reports was vacated in July 2025. The three major credit bureaus voluntarily adopted policies that remove paid medical collections, exclude debts under $500, and delay reporting for one year — but these are bureau policies, not legal requirements, and could change. In states like California and Colorado, state law restricts or bans medical debt credit reporting independently of federal rules.
Navigate the shifting rules before they catch up to you
Medical debt legislation is moving fast at the state level even while federal proposals stall. Whether your practice needs to update collection workflows, verify state-specific credit reporting restrictions, or build compliant financial assistance screening into your intake process, the compliance window is now — not after the next bill passes.
- Collection compliance aligned with current state and federal rules
- Good Faith Estimate and No Surprises Act workflows
- Patient financial assistance screening and documentation
- Revenue cycle adjustments for evolving medical debt regulations
MedHeave helps healthcare practices stay compliant with medical debt laws while protecting collectible revenue — contact us before the rules change again.
