The bill H.112 aims to provide medical debt relief for Vermont residents by directing the State Treasurer to contract with a nonprofit entity to acquire and abolish certain medical debts. It specifically targets individuals with incomes at or below 400 percent of the federal poverty level or those whose medical debt constitutes five percent or more of their household income. The bill appropriates $1,000,000 from the General Fund for fiscal year 2026 for this purpose and outlines that the contracted entity must purchase eligible medical debts at fair market value, abolish them without cost to the debtor, and ensure the removal of any adverse credit information related to the abolished debts.

Additionally, the bill introduces several provisions to protect consumers from the negative impacts of medical debt on their credit reports. It prohibits credit reporting agencies from reporting or maintaining information on medical debt and restricts health care providers from reporting such debts to these agencies. The bill also amends existing laws to allow organizations exempt from taxation under Section 501(c)(3) of the Internal Revenue Code to access credit reports for the purpose of determining eligibility for medical debt abolition. The act is set to take effect on July 1, 2025.

Statutes affected:
As Introduced: 9-2480b, 9-2480g, 18-221, 18-10