Medical Debt: Your Rights, New 2026 Rules, and How to Pay Less

Medical debt is the leading cause of personal bankruptcy in the United States, affecting an estimated 100 million Americans. But the landscape has shifted substantially since 2022. New federal rules, CFPB action, and state-level protections have dramatically reduced medical debt's power to damage your financial life. If you are dealing with medical bills — whether fresh from the hospital or years-old accounts in collections — this guide covers everything you need to know in 2026.

The 2023–2026 Medical Debt Credit Report Changes

The three major credit bureaus — Equifax, Experian, and TransUnion — have made a series of sweeping changes to how medical debt is treated on credit reports, largely under pressure from the Consumer Financial Protection Bureau (CFPB) and changing public sentiment about medical debt fairness.

• July 2022

  Equifax, Experian, and TransUnion announced that paid medical collection accounts would be removed from all credit reports. Previously, a paid medical collection could stay on your report for up to seven years.

• April 2023

  The bureaus removed all medical collection accounts under $500 from credit reports. This affected an estimated 22.8 million Americans and removed roughly $88 billion in medical debt from the credit reporting system.

• 2023 (Ongoing)

  The waiting period for unpaid medical collections to appear on credit reports extended to one year (up from six months), giving consumers more time to negotiate, apply for financial assistance, or dispute errors before their credit is impacted.

• January 2025

  The CFPB finalized a rule that would prohibit credit reporting agencies from including medical debt on consumer credit reports entirely. While legal challenges from industry groups are ongoing, this represents the most significant consumer protection action on medical debt in decades.

• 2026 and Beyond

  Multiple states have introduced legislation capping medical debt collection, extending statutes of limitations for disputing bills, and expanding charity care requirements. The trend is firmly in the direction of reducing medical debt's financial harm on American consumers.

Your Rights Before Paying a Medical Bill

Most people pay medical bills without questioning them. That is a costly mistake. You have significant rights before any money changes hands, and exercising those rights can reduce your bill by hundreds or thousands of dollars.

Hospital Charity Care Programs

Under the Affordable Care Act, every nonprofit hospital in the United States — which includes the vast majority of hospitals — must maintain a charity care (financial assistance) program and make the policy widely available. This is not optional. It is a legal requirement tied to their tax-exempt status.

• Eligibility is typically based on household income relative to the federal poverty level (FPL)
• Many programs provide free care for patients earning up to 200% FPL, and sliding-scale discounts up to 400% FPL or higher
• You can apply retroactively — even after a bill has been sent to collections at many hospitals
• Ask the hospital's billing department for their "financial assistance application" or "charity care application" by name

Right to an Itemized Bill

You have the right to a complete, line-by-line itemized statement of every charge on your medical bill. Do not accept a summary bill. Request the itemized statement in writing and review every single line item. Studies consistently find that a majority of medical bills contain errors, many of them significant.

Right to Negotiate

Medical bills are not fixed prices. Hospitals, medical practices, and even collection agencies expect negotiation. The list price on a medical bill — what you see if you are uninsured or have a high deductible — is almost always far higher than what insurers actually pay for the same services. You have every right to negotiate toward that lower rate.

How to Negotiate Medical Bills: 4 Strategies That Work

Medical Debt and Collections: Your FDCPA Rights

If your medical debt has been sent to a collection agency, the Fair Debt Collection Practices Act (FDCPA) applies in full force — the same as with any other type of debt. Medical collectors are not exempt from consumer protection law.

Your key rights under the FDCPA when dealing with medical debt collectors:

• Right to debt validation: Within 30 days of a collector's first contact, you can send a written request asking them to validate the debt. They must pause collection activity until they respond with verification.
• Right to stop contact: You can send a written cease-and-desist letter instructing the collector to stop contacting you. They must comply except to notify you of specific actions they intend to take.
• No harassment: Collectors cannot call before 8 a.m. or after 9 p.m., use abusive language, threaten arrest, or misrepresent the amount owed.
• Statute of limitations: Each state has a time limit on how long a creditor can sue to collect a debt. After that period, the debt is "time-barred" and collectors cannot legally threaten or file suit.

If a medical debt collector contacts you, always send a debt validation letter first. This forces them to prove the debt is yours, the amount is correct, and they have the legal right to collect it. Many medical collection accounts contain errors — wrong amounts, accounts that belong to someone else, or debts already paid — and validation requests catch these problems before you pay anything.

For more guidance on handling collection calls, see our guide on your rights when dealing with debt collection calls.

Medical Billing Errors to Look For

Billing errors in healthcare are extraordinarily common. A 2023 analysis found errors in over 80% of medical bills reviewed. The most costly errors include:

Error Type	What It Looks Like	What to Do
Duplicate charges	The same procedure or supply billed multiple times	Compare each line item; request a billing correction in writing
Upcoding	A billing code that reflects a more complex or expensive procedure than what was actually performed	Request the procedure codes and look them up; challenge discrepancies with a billing advocate or your insurer
Unbundling	Services that should be billed together are split into separate charges to inflate the total	Ask your insurer to review the coding; file a complaint if the hospital refuses to correct it
Services not received	Charges for tests, consultations, or supplies you did not actually receive	Cross-reference your Explanation of Benefits (EOB) from your insurer with the itemized bill
Incorrect insurance application	Your insurance was billed incorrectly or not applied to the right charges	Contact your insurer and the hospital billing department simultaneously; request re-billing
Out-of-network surprises	Charged for an out-of-network provider who treated you in an in-network facility	May be protected by the No Surprises Act (see below)

Surprise Medical Bills and the No Surprises Act

The No Surprises Act, which took effect January 1, 2022, provides significant protection against unexpected out-of-network bills. Before this law, patients routinely received enormous bills from out-of-network providers they never chose — anesthesiologists, radiologists, and emergency physicians who happened to be working at an in-network facility.

Under the No Surprises Act, you are protected from surprise bills when:

• You receive emergency care at any facility, regardless of network status
• You receive non-emergency care at an in-network facility from an out-of-network provider, unless you received proper advance notice and voluntarily consented to the out-of-network charge
• You receive air ambulance services from out-of-network providers

When the Act applies, your out-of-pocket costs cannot exceed what you would have paid for in-network services. If you receive a surprise bill that you believe is covered by the Act, you can file a complaint with the CFPB or the Centers for Medicare and Medicaid Services (CMS) at no cost.

When Medical Debt Goes to Collections

Under changes implemented in 2022–2023, medical providers must wait at least one year before reporting an unpaid medical debt to the credit bureaus. This gives you a meaningful window to resolve disputes, apply for charity care, or negotiate a settlement before your credit is impacted.

If a medical debt ends up in collections, take these steps in order:

1. Send a debt validation letter immediately. Use our free debt validation letter generator to create a legally compliant letter. The collector must verify the debt before continuing collection activity.
2. Check the account on your credit report. If the debt is under $500, or if you have paid it, it should not be on your report. Dispute any inaccurate medical collections directly with each credit bureau.
3. Verify the statute of limitations. Most states have a 3–6 year statute of limitations on medical debt. After that period, collectors cannot successfully sue you to collect. Knowing this strengthens your negotiating position significantly.
4. Negotiate a settlement or payment plan. Once the debt is validated, contact the collector and negotiate. Medical debt collectors often have more flexibility than other types of collectors because they purchased the debt at pennies on the dollar.

Medical Debt and Bankruptcy

Medical debt is one of the few types of debt that is fully dischargeable in bankruptcy. If your medical bills are truly unmanageable, Chapter 7 bankruptcy can eliminate them completely — along with most other unsecured debts like credit cards.

Key facts about medical debt and bankruptcy:

• Medical debt is treated as unsecured debt and is discharged in full under Chapter 7
• You do not need to prove the debt was acquired under any particular circumstances — medical debt is not means-tested for discharge eligibility
• Chapter 7 requires passing a means test based on your income, but many people dealing with overwhelming medical debt qualify
• Bankruptcy's automatic stay immediately stops all collection activity, lawsuits, and wage garnishments the moment you file
• Most states have generous exemptions that protect your home, car, and essential assets in Chapter 7

For detailed information on what assets you can protect, see our guide on Chapter 7 bankruptcy exemptions.

Bankruptcy is not the right choice for everyone, but if your medical debt is in the six figures and you have limited assets, it can provide a genuine fresh start that no negotiation strategy can match. Many bankruptcy attorneys offer free initial consultations and charge fees that can be paid on a payment plan.

State-Specific Medical Debt Protections

Several states have enacted protections that go well beyond federal law. If you live in one of these states, you may have additional rights and remedies available to you:

Even if your state is not listed above, check your state's Department of Health and Attorney General websites — medical debt protections are expanding rapidly at the state level. Many states have enacted or are actively considering similar legislation in 2025 and 2026.

Frequently Asked Questions