Guide
Medical Debt Forgiveness Act
Short answer: No federal law by that name has passed as of 2026, and there is no national program that automatically wipes out medical debt. What does exist: pending bills in Congress, the credit bureaus removing paid medical collections and not reporting collections under $500, state laws in 15 states plus the District of Columbia, and hospital charity care.
Last updated: 10 November 2026. This guide tells the truth about the medical debt forgiveness act: what passed, what is pending, what was struck down, and what actually helps now. It is educational content, not financial advice. For personal decisions, consider a licensed financial advisor or a nonprofit credit counselor.
The honest answer first
Medical debt forgiveness act is a phrase millions of Americans search for, and here is the truth up front: as of 2026, no federal law by that name has been signed into law. There is no national program that automatically wipes out medical debt. Ads claiming a forgiveness act passed in 2025 or 2026 are misleading, and some are outright scams designed to collect your personal information. What does exist is a set of pending bills in Congress, a federal court decision that killed the biggest protection, voluntary rules from the credit bureaus, real protections in some states, and hospital charity care that quietly erases billions every year. This guide separates all of it, then shows you what actually works right now.
What the name refers to
The phrase covers several different proposals that were never enacted as one law. In 2021, the federal government proposed revisions to the 2016 Medical Debt Relief Act, and those revisions became known as the Medical Debt Forgiveness Act. The idea was to give people more time to pay medical debt and to remove some paid medical debt from credit reports. Like most big health finance proposals, it was introduced, debated, and never passed. Since then the name has been reused by different bills, by news coverage, and unfortunately by advertisers who imply it is already law. It is not. Whenever you see the phrase, ask which specific bill is meant, and whether it passed both chambers and got a presidential signature. So far, none has.
The pending federal bills
Two major federal proposals are working through Congress. Neither has been enacted. The Medical Debt Relief Act of 2025, introduced in July 2025 as S.2519 in the Senate and H.R.4827 in the House, would amend the Fair Credit Reporting Act to prohibit credit bureaus from including medical debt on consumer credit reports and to prevent lenders from using medical debt information when evaluating loans. Current status: referred to committee in both chambers, not voted on. The Medical Debt Cancellation Act, H.R.8311, introduced by Rep. Ro Khanna during the 118th Congress, would fund federal medical debt elimination. Current status: referred to committee, not advanced beyond initial review. Bills at this stage usually die quietly when the session ends. Do not plan your finances around them passing.
The CFPB rule that was struck down
In January 2025, the Consumer Financial Protection Bureau finalized a rule that would have banned medical debt from credit reports entirely, regardless of the balance, and would have covered roughly 15 million Americans. It never took effect. On July 11, 2025, the US District Court for the Eastern District of Texas vacated the rule in Cornerstone Credit Union League v. CFPB, at the joint request of the Bureau and the plaintiffs, ruling that the agency had overstepped its regulatory authority. In October 2025, the CFPB then issued an interpretive rule taking the position that federal law preempts state laws that regulate the contents of credit reports. That view is not binding and courts will decide the question. In August 2026, a federal court in Texas held a Texas medical debt reporting law preempted. The legal fight is ongoing, and for now there is no nationwide federal ban.
What actually protects you today: the bureau policies
What protects most people now is a set of voluntary policies from the three major credit bureaus, Equifax, Experian, and TransUnion, announced in 2022 and completed in stages. These are bureau policies, not federal law, so the bureaus could change them, but they still stand as of October 2026. First, paid medical collections are removed from credit reports entirely, in effect since July 2022. Pay a medical collection and it comes off. Second, unpaid medical collections wait one year before appearing, giving you time to resolve the bill with the provider or the insurer. Third, medical collections under $500 are not reported, even if unpaid, in effect since April 2023. What can still appear is unpaid medical debt of $500 or more that is at least a year old, which can stay on your report for up to seven years. Check your reports at annualcreditreport.com and dispute anything that breaks these rules.
State laws: where the real progress is
As of late 2025, 15 states and the District of Columbia have laws limiting medical debt on credit reports, including California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia, and Washington. Some states went further than credit reporting. North Carolina, Illinois, and Louisiana have executed large medical debt cancellation programs using state funds and nonprofit partnerships, erasing billions in medical debt for residents. New York and Hawaii have moved pilot programs that let hospitals buy and forgive medical debt in partnership with nonprofits. Check your own state, because state rules are now the strongest protection most people have, and they change every legislative session.
Hospital charity care: the most reliable forgiveness
Hospital charity care remains the most reliable form of forgiveness, and most people who qualify never apply. Nonprofit hospitals are required under IRS rules to offer financial assistance, and the application window runs 240 days from the first billing statement. With inflation adjustments to the Federal Poverty Level in 2025 and 2026, a family of four earning up to roughly $132,000 may now qualify for significant discounts at nonprofit hospitals, and many hospitals discount bills for families earning well above the poverty line. Ask the hospital billing office for a financial assistance application, in writing, as soon as you get the bill. Waiting is the biggest mistake patients make: while you wait for news about new federal laws, your account ages past the 240 day window to apply. If the hospital already sent the bill to collections, apply anyway and tell the collector the application is pending.
Undue Medical Debt and other nonprofits
Undue Medical Debt, formerly known as RIP Medical Debt, buys unpaid medical debt for pennies on the dollar and cancels it. It works with hospitals, health systems, and state programs, and it has cancelled billions in debt across the country. You cannot apply to it directly in most cases: it acquires debt in bulk from providers and states. But it is worth knowing it exists, because it explains why some people wake up to a letter saying their medical debt was cancelled with no action from them. Your state may also run its own program, so search your state name plus medical debt relief to see whether a program covers you.
What to do with a medical bill right now
Do not wait for a law. Work the bill in this order. One, get an itemized bill and check every line. Billing errors are common, duplicate charges, services you never received, and charges that should have gone to insurance. Two, call the provider and ask for financial assistance, and get the application in writing. Three, negotiate the price: hospitals routinely accept less than the billed amount, especially for cash payment, and many will agree to an interest free payment plan. Four, never put a medical bill on a credit card unless you have no other choice. A medical bill is often interest free and negotiable. A credit card balance at 24% is neither, and it loses the bureau protections that medical debt gets. Five, if the bill is already in collections, read our guide to paying off debt in collections before you pay a dollar: validate first, check the statute of limitations, then negotiate in writing. Six, build the small starter buffer from our emergency fund vs debt payoff guide so the next bill does not become new debt.
Scams to watch for
Any company that charges you a fee to apply for medical debt forgiveness is almost certainly a scam. Real forgiveness comes from hospitals, states, and nonprofits, and none of them charge you to apply. Be suspicious of ads saying a forgiveness act just passed and you must act now, of anyone asking for your Social Security number or bank details over the phone, and of debt relief companies promising to cut your medical debt in half for a fee. If a company contacts you about medical debt, verify it independently: call the hospital billing office at the number on your bill and ask whether the company is legitimate. And if a collector threatens you, know your rights under the Fair Debt Collection Practices Act: no calls before 8 in the morning or after 9 at night, no harassment, no false threats, and the right to demand validation in writing. Every result here is an estimate for education only, not financial advice. For personal decisions, consider a licensed financial advisor or a nonprofit credit counselor.
Sources
The Consumer Financial Protection Bureau finalized the medical debt rule in January 2025, and the rule was vacated in July 2025. Check your own credit reports for free at annualcreditreport.com, the official site for free reports from all three bureaus.
Frequently asked questions
Has the Medical Debt Forgiveness Act passed?
No. As of 2026, no federal law titled the Medical Debt Forgiveness Act has been signed into law. Several bills with similar names are pending in Congress, and a CFPB rule that would have banned medical debt from credit reports was vacated by a federal court in July 2025. Ads claiming a forgiveness act passed are misleading.
What is the Medical Debt Relief Act of 2025?
It is a bill introduced in July 2025 as S.2519 in the Senate and H.R.4827 in the House. If enacted, it would amend the Fair Credit Reporting Act to prohibit credit bureaus from including medical debt on reports and prevent lenders from using medical debt when evaluating loans. It was referred to committee in both chambers and has not been voted on.
Does medical debt under $500 appear on my credit report?
No, under the three major credit bureaus voluntary policies, medical collections under $500 are not reported, even if unpaid, in effect since April 2023. Paid medical collections are also removed entirely, and unpaid collections wait one year before appearing. These are bureau policies, not federal law, so they could change.
Can a hospital forgive my medical bill?
Often yes. Nonprofit hospitals must offer financial assistance under IRS rules, and many discount bills substantially for families earning well above the poverty line. The application window runs 240 days from the first billing statement, so apply as soon as you get the bill. Ask the billing office for a financial assistance application in writing.
What happened to the CFPB medical debt rule?
The CFPB finalized a rule in January 2025 that would have removed medical debt from credit reports. On July 11, 2025, the US District Court for the Eastern District of Texas vacated it in Cornerstone Credit Union League v. CFPB, ruling the agency overstepped its authority. The rule never took effect.
How do I get medical debt forgiven if there is no federal law?
Work the real channels: apply for hospital financial assistance within the 240 day window, negotiate the bill directly with the provider, ask for an interest free payment plan, check whether your state runs a cancellation program, and dispute any credit report entry that breaks the bureau policies. Never pay a company a fee to apply for forgiveness.