Michigan Moves to Shield Residents from Medical Debt on Credit Reports

Michigan lawmakers are taking significant steps to alleviate the financial strain of medical debt on residents.

Recent bipartisan legislation aims to prevent medical debt from appearing on consumer credit reports and to simplify access to hospital financial assistance programs.

On June 26, 2025, Senate Bill 451 was introduced, proposing the "Medical Debt Act."

This act seeks to prohibit consumer reporting agencies from including medical debt in credit reports, thereby preventing such debt from negatively impacting individuals' credit scores.

Additionally, the bill outlines standards for the collection of medical debt and provides remedies for consumers.

In the House, House Bill 4329 was introduced on April 17, 2025, with a similar objective of regulating the collection and reporting of medical debt information.

State Representative Denise Mentzer emphasized the importance of this legislation, stating, "Hardworking Michiganders already struggle to get by in this economy, and the last thing they need is to fall into inescapable debt due to an unforeseen medical crisis."

She highlighted that medical debt often does not reflect a person's financial responsibility or creditworthiness and can hinder access to necessities like housing and transportation.

These legislative efforts come in response to the fact that nearly 700,000 Michiganders are burdened with medical debt.

By removing medical debt from credit reports, the bills aim to prevent individuals from being denied economic opportunities due to health-related financial challenges.

However, these state initiatives face potential challenges at the federal level.

In October 2025, the Consumer Financial Protection Bureau (CFPB) under the Trump administration moved to override state laws that protect consumers' credit reports from medical debt.

The CFPB's interpretative rule under the Fair Credit Reporting Act (FCRA) aims to preempt state-specific regulations on debt reporting, potentially nullifying state efforts to exclude medical debt from credit reports.

Despite these federal challenges, Michigan lawmakers remain committed to protecting residents from the adverse effects of medical debt on their financial well-being.

By advocating for these bills, they aim to ensure that unforeseen medical expenses do not lead to long-term financial hardship for Michiganders.