A bipartisan proposal aims to help protect Ohioans from the negative impact of medical debt, which one lawmaker called “a crisis hiding in plain sight.”
House Bill 257, the Ohio Medical Debt Fairness Act, lowers the maximum interest rate for medical debt to 3% per year. The measure, which has been referred to the House Health Committee, would also ban wage garnishment for medical debt collections and bar hospitals, medical providers, and third-party collectors from reporting medical debt to credit agencies.
“Medical debt can happen to anyone, and no one should face financial hardship just because they need care,” state Rep. Michele Grim, D-Toledo, said in a release. “This bipartisan effort is about fairness, dignity, and protecting Ohio families from a broken system that too often punishes people for getting sick.”
According to Cleveland.com, once medical debt in the Buckeye State goes to collections, the statutory interest rate is 8% annually. Set annually by the Ohio Tax Commissioner, the rate applies to all judgments Ohio courts grant unless a different rate is stipulated in a written contract.
“It’s a crisis hiding in plain sight,” Ideastream quoted Grim as saying. “States across the country have already taken steps to reform how medical debt is treated. It’s time for Ohio to do the same.”
Estimates indicated that roughly 100 million Americans have medical debt, totaling more than $200 billion. According to KFF, the Kaiser Family Foundation, about 9.1% of Ohioans had medical debt between 2019 and 2021.
That would total more than 1 million people, considering the Buckeye State’s population was 11.69 million in 2020.
Additionally, Undue Medical Debt, a nonprofit that uses donations to buy bundled medical debts at steep discounts, cited a 2019 study that found that more than a third (35%) of Ohio adults struggled to pay their medical bills.
“This is a commonsense bill that will give Ohioans added safeguards so that they can continue to get well without fear of unexpected, excessive financial burden,” state Rep. Jean Schmidt, R-Loveland, said in a release. “This is not a partisan issue; this is a people issue.
“This bill does not forgive the debt. You will still have to pay for it,” Ideastream quoted Schmidt as saying. “But it provides the necessary guardrails so it doesn’t ruin your credit, have you not be able to have a wage to live on, possibly losing your house or your car. That can’t happen. Medical debt is not a choice.”
According to a news release, Grim spearheaded a similar effort while serving on the Toledo City Council, securing a $1.6 million joint commitment from Toledo and Lucas County. They partnered with Undue Medical Debt to nullify residents’ debt for pennies on the dollar.
To date, more than 43,000 Lucas County residents have received relief. The initial investment also leveraged private donations to deliver additional support for patients of local hospital systems, and more than $230 million in medical debt has been eliminated for more than 112,000 people in the region.
Separately, in 2023, the Central Ohio Hospital Council and the city of Columbus announced a plan to forgive $335 million in medical debt for local residents.
The push to eliminate medical debt isn’t limited to the Buckeye State.
In Virginia, Republican Gov. Glenn Youngkin signed a similar measure, House Bill 1725, the Medical Debt Protection Act. The Virginia legislation takes effect on July 1, 2026.
It similarly caps interest rates on medical debt to 3% annually. It also bars large healthcare facilities and medical debt buyers from charging interest or late fees on medical debt until 90 days after the due date on the final invoice.
