Medical Debt Can Still Hit Your Credit Report in 35 States

A medical bill in collections can follow patients onto their credit reports, where it can make borrowing harder or more expensive and, in most states, raise car insurance prices. Fifteen states and Washington, D.C., have responded with laws that bar or limit medical debt on consumer credit reports, but none of the 12 states where medical debt is statistically more common than the national average has one.

MoneyGeek compared each state's law, as tracked by the National Consumer Law Center (NCLC), with Peterson-KFF Health System Tracker estimates of the share of adults who owe more than $250 in unpaid medical bills. About 71% of adults with medical debt live in states without a ban, and industry groups are now challenging existing state laws in federal court. The laws also vary in scope: New Jersey's direct reporting limit covers only medical debts under $500, though its law also includes provider-contract requirements.

KFF's state estimates cover 2019 to 2021, before the current bans and limits counted in this analysis took effect. The figures show where medical debt was most common before the bans, and they can't measure whether the laws reduced it. At the end of 2021, medical debt totaled at least $220 billion, and about 20 million adults (nearly 1 in 12) owed more than $250, KFF found in its analysis of Census Bureau survey data.

NCLC's tracker, last updated Sept. 21, 2026, counts 15 states and Washington, D.C., with laws that bar or limit medical debt on credit reports, and MoneyGeek confirmed the list Oct. 2, 2026: California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia and Washington. Of the current laws, Colorado's took effect first, on Aug. 7, 2023. Maine has limited medical debt reporting since 2019 and broadened its law in 2025. Oregon's law took effect Jan. 1, 2026, and Washington, D.C.'s became law Aug. 20, 2026, and D.C.'s fiscal 2027 budget legislation sets its requirements to start Oct. 1, 2026.

State medical debt laws differ in scope. In this analysis, a ban is any state law that bars or limits the reporting of medical debt to credit bureaus, and New Jersey's is the only partial one. Most bar medical providers and debt collectors from furnishing medical debt to credit bureaus, and six states (California, Connecticut, Maryland, New Jersey, New York and Rhode Island) also require provider contracts to stop collectors from reporting. New Jersey's law is the narrowest: its reporting limit covers medical debt under $500, and Equifax, Experian and TransUnion removed medical collections with initial balances under $500 in April 2023. Colorado's law is set to be repealed July 1, 2028, unless lawmakers extend it.

South Dakota has the highest share of adults with medical debt in the U.S.: 17.7% owed more than $250 in unpaid medical bills in an average year from 2019 to 2021, KFF found. Mississippi (15.2%), North Carolina (13.4%), West Virginia (13.3%) and Georgia (12.7%) complete the top five, and KFF found all five statistically higher than the 8.6% national average.

Hawaii has the lowest share of adults with medical debt at 2.3%, followed by Washington, D.C. (2.7%), California (3.9%), Massachusetts (5.1%), Oregon (5.2%) and Rhode Island (5.2%). KFF found all six statistically below the national average, and South Dakota's 17.7% rate is about 7.7 times Hawaii's.

KFF averaged three years of Census Bureau Survey of Income and Program Participation (SIPP) data to get reliable estimates for smaller states. KFF doesn't publish margins of error. It flags only whether each state differs statistically from the national average, and 30 of the 51 jurisdictions don't. Small differences between neighboring states in this ranking aren't meaningful.

No state with a statistically above-average medical debt rate has a credit reporting ban. KFF found medical debt statistically higher than the 8.6% national average in 12 states: Alabama, Georgia, Indiana, Kentucky, Mississippi, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas and West Virginia. Texas had a narrower 2019 law covering certain surprise medical bills, but a federal judge permanently blocked its enforcement in August 2026 after ruling that federal credit reporting law preempts it. North Carolina's protection comes from a Medicaid payment program instead: all 99 of its acute care hospitals agreed to stop reporting covered patient debt to credit bureaus starting July 1, 2025, the state health department says.

States with credit reporting bans had lower medical debt rates before their current laws took effect. Six of the nine jurisdictions KFF found statistically below the national average have bans: California, New York, Oregon, Rhode Island, Washington state and Washington, D.C. Across the 16 ban jurisdictions (15 states and Washington, D.C.), the simple average share of adults with medical debt is 7.5%, compared with 9.9% across the 35 states without a ban.  

Vermont is the only top-10 state with a ban. Its 12.2% share isn't statistically different from the national average, and its law took effect July 1, 2025. Connecticut (10.2%), Maine (10.2%) and Illinois (10.1%) also have bans and shares above 10%, though KFF found none of the three statistically different from the average.  

Six of the 10 states with the highest shares (Georgia, Mississippi, North Carolina, South Carolina, South Dakota and Tennessee) hadn't expanded Medicaid during the 2019 to 2021 survey years, KFF's expansion tracker shows. This comparison can't show that expansion status caused their higher rates. South Dakota expanded in July 2023 and North Carolina in December 2023. MoneyGeek's analysis of why 10 states account for 42% of the uninsured covers the states that still haven't expanded.  

About 71% of adults with medical debt live in the 35 states without a credit reporting ban, based on MoneyGeek's analysis of KFF's state estimates of how many adults owe medical debt. Texas has the largest number, about 2.3 million adults, followed by Florida at about 1.5 million.

In the Urban Institute's Debt in America data, based on an August 2025 credit bureau snapshot, seven states with bans in effect have no medical collections figure, which Urban attributes to state laws that restrict medical debt reporting: California, Colorado, Illinois, New York, Rhode Island, Vermont and Washington. Urban's figures measure credit files, and KFF's shares measure surveyed adults. The two sets of figures aren't comparable.  

In the four other states whose current laws were in effect by then, the share of credit files with medical collections was below 1.5%: 0.25% in Minnesota, 0.81% in Virginia, 0.88% in Connecticut and 1.49% in New Jersey. Maine, whose earlier law required a 180-day wait before reporting, had 4.96%. Nationally, 3.22% of people with a credit record had medical collections on their credit reports, with a median balance of $1,448. Oklahoma (8.66%), Wyoming (8.46%) and Tennessee (7.88%) had the highest shares, and none of the three has a ban.  

Patients in Colorado, New York and other ban states still owe their medical bills. State bans aim to keep qualifying medical debt off consumer credit reports, which can affect access to credit and, in most states, car insurance prices. MoneyGeek found poor credit can cost drivers more on car insurance than a DUI.

A federal court vacated the Consumer Financial Protection Bureau's (CFPB) medical debt rule on July 11, 2025, before it took effect. The CFPB finalized the rule in January 2025 and estimated it would remove $49 billion in medical bills from the credit reports of 15 million Americans. The rule was scheduled to take effect March 17, 2025. Cornerstone Credit Union League and the Consumer Data Industry Association sued in the Eastern District of Texas. The court postponed the rule's effective date to June 15, 2025, and the CFPB later joined the industry groups' request to vacate it.  

Judge Sean D. Jordan's July 2025 opinion also addressed state laws. Jordan wrote that "any state law purporting to prohibit a CRA from furnishing a credit report with coded medical information would be inconsistent with FCRA and therefore preempted." CRA stands for consumer reporting agency, and FCRA stands for the Fair Credit Reporting Act. No state law was before the court, and NCLC calls the statement non-binding.  

In an interpretive rule published Oct. 28, 2025, the CFPB took the same position: the FCRA preempts state laws that bar medical debt from credit reports. It replaced a July 2022 CFPB interpretation that said states were free to pass them. The CFPB says the new rule "has no legally binding effect." The industry lawsuits against Colorado and Minnesota make the same preemption argument.  

Without the federal rule, the main nationwide protections are voluntary policies at Equifax, Experian and TransUnion. The three credit bureaus stopped reporting paid medical collections on July 1, 2022, and began waiting one year before reporting unpaid ones. In April 2023, the bureaus also removed medical collections with initial balances under $500. The CFPB found the share of consumers with medical collections fell from about 14% to about 5% between March 2022 and June 2023.

Industry groups have sued Colorado and Minnesota over the states' medical debt credit reporting laws, and both cases were still pending as of Oct. 2, 2026. ACA International, a debt collection trade group, filed ACA International v. Fulford in federal court in Colorado on Nov. 5, 2025. The group argues that the FCRA preempts Colorado's law and that the law violates the First Amendment. Briefing on Colorado's renewed motion to dismiss finished Aug. 28, 2026.  

The Consumer Data Industry Association (CDIA), a credit reporting trade group, sued Minnesota on Feb. 13, 2026, in CDIA v. Ellison. A federal judge heard Minnesota's motion to dismiss on May 12, 2026, and no ruling had been reported as of Oct. 2, 2026. NCLC also reports that a CDIA challenge to Maine's law is back in federal court.  

Texas lost its case on Aug. 10, 2026. U.S. District Judge Robert Pitman ruled that the FCRA preempts a 2019 Texas law barring credit bureaus from reporting certain surprise medical bills owed by insured patients, and he permanently blocked the state from enforcing it. Pitman disagreed with a 2022 ruling by the 1st U.S. Circuit Court of Appeals that read federal preemption more narrowly in a Maine case. He also rejected the industry's broadest argument, that federal law preempts any state law about information in credit reports.  

State and federal lawmakers are still proposing new limits. Michigan's House passed HB 6073, which regulates medical debt credit reporting, by a vote of 94 to 12 on June 23, 2026, and Massachusetts proposed rules in June 2026 to ban medical debt from credit reports, which hadn't been finalized as of Oct. 2, 2026. In Congress, Sen. John Kennedy (R-La.) introduced the PATCH Act (S. 4622) on May 21, 2026, to bar medical debt from credit reports nationwide. South Dakota, the state with the highest share of adults with medical debt, had a ban bill in 2025 that didn't pass.

Insured patients end up with medical debt when deductibles and denied claims leave bills their health plans don't pay. Crowe found that balances patients owed after insurance made up 57.6% of hospital patient bad debt in 2021, up from 11.1% in 2018, in data from 1,413 hospitals in 47 states. Plans with higher deductibles shift more of the first bills to patients, as MoneyGeek's comparison of high-deductible and low-deductible plans shows.  

Hospital data from 2025 shows patient balances growing. Kodiak Solutions, which analyzes revenue data from more than 2,300 hospitals, found the share of hospital revenue patients were responsible for paying rose from 6.8% in 2024 to 7.3% in 2025, while the median hospital bad debt rate climbed from 1.1% to 1.3%. Enhanced ACA premium tax credits also expired Dec. 31, 2025, and 87% of 2026 marketplace enrollees received premium tax credits, down from 92% in 2025, CMS reports. MoneyGeek's ACA subsidy cliff analysis shows what enrollees who lost subsidies pay by state.

MoneyGeek ranked all 50 states and Washington, D.C., from highest to lowest by the share of adults with more than $250 in medical debt, alongside each state's credit reporting ban status. States with the same rounded share receive the same rank.

MoneyGeek ranked all 50 states and Washington, D.C., by the share of adults 18 and older who reported owing more than $250 in unpaid medical bills, not counting amounts adults expected insurance to pay. The figures come from the Peterson-KFF Health System Tracker's analysis of the Census Bureau's Survey of Income and Program Participation ("The burden of medical debt in the United States," Feb. 12, 2024), averaged over 2019 to 2021, and were accessed Oct. 2, 2026. KFF reports whether each state differs statistically from the 8.6% national average but doesn't publish margins of error.  

MoneyGeek took ban status from NCLC's tracker (updated Sept. 21, 2026) and confirmed each law against its statute. Law status and court cases were last checked Oct. 2, 2026. Medical collections data is the share of people with a credit record who had medical collections on their credit reports in August 2025, from the Urban Institute's Debt in America 2025 data, accessed Oct. 2, 2026. The Urban Institute doesn't report that figure for seven states whose laws restrict medical debt reporting.  

The 71% figure adds up KFF's estimates of the number of adults with medical debt in each state. KFF rounds those estimates, and the share is approximate. KFF's 2019 to 2021 survey data predates the current bans and limits counted in this analysis and doesn't measure the laws' effects.