A new Delaware law which recently took effect excludes past due medical debt from appearing on credit reports. The purpose of the law is to protect families from financial consequences of illness and injury.
“When we remove barriers like medical debt from the equation, we strengthen Delaware’s families, communities and economy,” Governor Matt Meyer said. “With this law now in effect, we are helping thousands of Delawareans breathe a little easier and ensure that no one’s financial future is destroyed because they got sick or needed care.”
Last year, the Biden Administration finalized a rule that would remove medical debt from the credit reports of millions of Americans nationwide with about 15 million Americans seeing $49 billion in medical debts removed from their credit reports. A lawsuit was filed challenging the rule and it was ultimately rescinded by the Trump Administration.
“When it comes to medical debt, we are all just one accident or one diagnosis away from being in an entirely catastrophic financial position,” Senator Spiros Mantzavionos said. “Incurring medical debt can affect anybody at any time, no matter our socio-economic circumstances. That’s why I am glad that SB 156 is going into effect, especially now, as we approach the beginning of our open enrollment with the threat of higher medical insurance costs for many Americans. SB 156 is an important update to our Medical Debt Protection Act that will prevent those experiencing medical debt from facing additional obstacles with credit reporting agencies, consumer reports and others.”
In addition to the removal of debt from credit reports, Meyer announced a partnership between the State of Delaware and national non-profit Undue Medical Debt, leveraging $500,000 in state funds to purchase and eliminate up to $50 million in medical debt for an estimated 17,000 or more Delawareans. Eligible Delawareans will begin receiving letters in the coming weeks informing them that their debt has been eliminated.
“Everyone knows how expensive medical care can be, and with Affordable Care Act subsidies expiring soon, those costs are about to become even more unaffordable for many families, Representative Kim Williams, who co-sponsored the bill, said. “That’s why this law taking effect now is so important. It gives thousands of Delawareans a fresh start and eases the weight of medical debt, something that’s often beyond a person’s control.”
The initiative was a key piece of Meyer’s FY2026 budget. Undue Medical Debt purchases bundled medical debt portfolios from hospitals and commercial debt buyers for pennies on the dollar and then abolishes that debt entirely with no application process required. Qualifying Delaware residents will receive a letter from Undue Medical Debt confirming their relief.
