Congress moves to ban hospital wage garnishment, fund medical debt forgiveness
H.R. 7478 — Patient Debt Relief Act · Filed by Gabriel (Gabe) Vasquez (D-NM) · 18 cosponsors · Introduced Feb 10, 2026 · Referred to committee
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What it does
This bill imposes new financial assistance and debt collection standards on hospitals participating in Medicare, requiring them to establish charity care policies, screen patients for eligibility before collection, and prohibit wage garnishment and home liens for medical debt. It also creates a $100 million federal grant program to fund nonprofit organizations that acquire and forgive medical debt for low-income individuals.
Why we flagged it
The bill's core function is to restrict hospital debt collection practices and fund direct medical debt forgiveness. It is fundamentally a consumer protection and public health measure, not a tax or appropriations carve-out.
What the text implies
- Hospitals may respond by raising prices on insured patients or those not eligible for charity care, shifting costs to commercial payers and employers.
- The 1-year waiting period before debt can be sold to collectors may incentivize hospitals to pursue collection more aggressively in the first 12 months.
The full analysis lists 5 implications of this text.
Who stands to gain
nonprofit debt relief organizations; low-income households; uninsured and underinsured patients