BILL AS INTRODUCED S.27
2025 Page 1 of 5
VT LEG #379231 v.1
S.27 1
Introduced by Senators Lyons, Baruth, Beck, Bongartz, Brennan, Chittenden, 2
Clarkson, Collamore, Cummings, Gulick, Hardy, Harrison, 3
Hart, Hashim, Major, Norris, Plunkett, Ram Hinsdale, 4
Vyhovsky, Watson, Westman and White 5
Referred to Committee on 6
Date: 7
Subject: Health; consumer protection; credit reporting; medical debt 8
Statement of purpose of bill as introduced: This bill proposes to direct the 9
State Treasurer to contract with an entity to acquire and abolish certain medical 10
debts for Vermonters with incomes at or below 400 percent of the federal 11
poverty level or who owe medical debt equal to five percent or more of their 12
household income. The bill would also prohibit credit reporting agencies from 13
reporting or maintaining information on Vermonters’ medical debt and would 14
prohibit health care providers from reporting medical debt to credit reporting 15
agencies. 16
An act relating to medical debt relief and excluding medical debt from 17
credit reports 18 BILL AS INTRODUCED S.27
2025 Page 2 of 5
VT LEG #379231 v.1
It is hereby enacted by the General Assembly of the State of Vermont: 1
Sec. 1. STATE TREASURER; MEDICAL DEBT RELIEF; 2
APPROPRIATION 3
(a) The sum of $1,000,000.00 is appropriated to the State Treasurer from 4
the General Fund in fiscal year 2026 for the purpose of contracting with a 5
nonprofit entity to acquire and repay certain medical debts incurred by 6
Vermont residents as set forth in this section. 7
(b) The State Treasurer shall ensure that the entity with which the Treasurer 8
contracts under this section will: 9
(1) purchase the medical debt of eligible debtors from health care 10
providers at fair market value; 11
(2) abolish the debt with no cost or tax consequences for the debtor; and 12
(3) coordinate with the health care provider or collections agency to 13
ensure that any adverse information resulting from the medical debt is removed 14
from the debtor’s consumer credit report following the contractor’s purchase 15
and abolition of the debt. 16
(c) In order to be eligible for repayment of medical debt under this section, 17
the following conditions must be met: 18
(1) the debtor shall be a Vermont resident who either has a household 19
income that is at or below 400 percent of the federal poverty level for the 20 BILL AS INTRODUCED S.27
2025 Page 3 of 5
VT LEG #379231 v.1
applicable household size or who owes medical debt in an amount that is five 1
percent or more of the debtor’s household income; and 2
(2) the debtor’s patient account still maintains an outstanding balance 3
even after the health care provider has completed its routine efforts to collect 4
the amounts due. 5
Sec. 2. 2022 Acts and Resolves No. 83, Sec. 53(b)(5)(B), as amended by 2022 6
Acts and Resolves No. 185, Sec. C.102 and 2023 Acts and Resolves No. 78, 7
Sec. E.1000, is further amended to read: 8
(B) $20,000,000 $19,000,000 shall be appropriated to the State 9
Treasurer’s Office and used for redeeming State of Vermont general obligation 10
bonds prior to maturity. 11
Sec. 3. 9 V.S.A. § 2466d is added to read: 12
§ 2466d. REPORTING OF MEDICAL DEBT INFORMATION 13
PROHIBITED 14
A credit reporting agency shall not report or maintain in the file on a 15
consumer information relating to a medical debt, as defined in 18 V.S.A. 16
§ 9481. 17
Sec. 4. 9 V.S.A. § 2480b is amended to read: 18
§ 2480b. DISCLOSURES TO CONSUMERS 19
* * * 20 BILL AS INTRODUCED S.27
2025 Page 4 of 5
VT LEG #379231 v.1
(c) Any time a credit reporting agency is required to make a written 1
disclosure to consumers pursuant to 15 U.S.C. § 1681g, it shall disclose, in at 2
least 12-point type, and in bold type as indicated, the following notice: 3
“NOTICE TO VERMONT CONSUMERS 4
* * * 5
(2) Under Vermont law, no one may access your credit report without 6
your permission except under the following limited circumstances: 7
* * * 8
(F) where the request for a credit report is related to a credit 9
transaction entered into prior to January 1, 1993; or 10
(G) where the request for a credit report is by the Vermont 11
Department of Taxes and is used for the purpose of collecting or investigating 12
delinquent taxes; or 13
(H) where the request for a credit report is by an organization that is 14
exempt from taxation under Section 501(c)(3) of the Internal Revenue Code 15
for the purpose of determining eligibility for the abolition of medical debt. 16
* * * 17
Sec. 5. 9 V.S.A. § 2480g is amended to read: 18
§ 2480g. EXEMPTIONS 19
* * * 20 BILL AS INTRODUCED S.27
2025 Page 5 of 5
VT LEG #379231 v.1
(e) The provisions of section 2480e of this title shall not apply to an 1
organization that is exempt from taxation under Section 501(c)(3) of the 2
Internal Revenue Code when determining eligibility for the abolition of 3
medical debt. 4
Sec. 6. 18 V.S.A. chapter 221, subchapter 10 is amended to read: 5
Subchapter 10. Patient Financial Assistance and Medical Debt 6
* * * 7
§ 9485. PROHIBITION ON SALE OR REPORTING OF MEDICAL DEBT 8
(a)(1) No large health care facility shall sell its medical debt except as 9
provided in subdivision (2) of this subsection. 10
(2) A large health care facility may sell or otherwise transfer its medical 11
debt to an organization that is exempt from taxation under Section 501(c)(3) of 12
the Internal Revenue Code for the specific purpose of the tax-exempt 13
organization abolishing the medical debt of one or more patients by 14
cancellation of the indebtedness. 15
(b) No large health care facility or medical debt collector shall report or 16
otherwise furnish any portion of a medical debt to a credit reporting agency. 17
* * * 18
Sec. 7. EFFECTIVE DATE 19
This act shall take effect on July 1, 2025. 20