COLUMBUS, Ohio — A bipartisan pair of Ohio lawmakers want to keep medical debt from tanking people’s credit or garnishing their paychecks. The Ohio Medical Debt Fairness Act, introduced Tuesday, would cap interest rates on medical debt at 3% annually, ban wage garnishment for unpaid medical bills, and block hospitals or third-party collectors from reporting that debt to credit agencies. Patients would still owe the money, but House Bill 257 aims to give them more time—and less financial fallout—to repay it.

“It doesn’t fix all of our problems,” said state Rep. Michele Grim, a Toledo Democrat. “But this does make the playing field fairer for all patients.” A health policy nonprofit called KFF estimated that 697,600 Ohioans (6% of the population) were uninsured in 2023. And families, on average, pay nearly $24,000 a year for their employer health insurance.

“Medical debt occurs when you least expect it and are unprepared for the unexpected costs associated with it,” Grim said. “You might have insurance, but there are unintended costs that go outside of insurance.” About 9% of Ohio adults report having more than $250 in medical debt annually, according to data analysis by the nonprofit Peterson Center on Healthcare, which focuses on healthcare affordability. Nationwide, about 20 million people owe medical debt, according to U.S. Census data from the Survey of Income and Program Participation.

Most of the $220 billion owed is tied up in large debts of over $10,000 per person. “Medical debt is not a choice,” said state Rep. Jean Schmidt, a Hamilton County Republican. “It’s not like when you take out a car loan or max out your credit card to go to Disney World.” In Ohio, once medical debt goes to collections, the statutory interest rate is 8% per year.

This rate is set annually by the Ohio Tax Commissioner and applies to all judgments granted by Ohio courts unless a different rate is specified in a written contract. HB 257 would bring that maximum rate down to 3% for all medical debt–including those with contracted rates. “We’re giving Ohioans added safeguards so they can continue to get well,” Schmidt said.

Ohio isn’t the only state considering limits on medical debt collection. Virginia’s governor just signed a bill restricting how debt collectors seeking money for hospitals and doctors operate. Anna Staver covers state government and politics for Cleveland.com/The Plain Dealer.