Vermont S 27: An act relating to maintaining the home health agency provider tax

Bill Text

No. 21 Page 1 of 6
2025

VT LEG #383896 v.1
No. 21. An act relating to medical debt relief and excluding medical debt
from credit reports.
(S.27)
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. STATE TREASURER; MEDICAL DEBT RELIEF;
APPROPRIATION
(a) The sum of $1,000,000.00 is appropriated to the State Treasurer from
the General Fund in fiscal year 2026 for the purpose of contracting with a
nonprofit entity to acquire and repay certain medical debts incurred by
Vermont residents as set forth in this section.
(b) The State Treasurer shall ensure that the entity with which the Treasurer
contracts under this section will:
(1) purchase the medical debt of eligible debtors from health care
providers at fair market value;
(2) abolish the debt with no cost or tax consequences for the debtor;
(3) coordinate with the health care provider or collections agency to
ensure that any adverse information resulting from the medical debt is removed
from the debtor’s consumer credit report following the contractor’s purchase
and abolition of the debt; and
(4) notify each individual whose medical debt was abolished pursuant to
this section:

No. 21 Page 2 of 6
2025

VT LEG #383896 v.1
(A) the amount of the individual’s medical debt that was abolished
and the name of the health care provider or providers from whom the entity
purchased the individual’s debt;
(B) the estimated percentage of the federal poverty level that
corresponds to the individual’s household income; and
(C) that financial assistance policies are available at all Vermont
hospitals in accordance with 18 V.S.A. § 9482, including the following
minimum discounts:
(i) a 100 percent discount for individuals with household income
at or below 250 percent of the federal poverty level; and
(ii) at least a 40 percent discount for individuals with household
income between 250 and 400 percent of the federal poverty level.
(c) In order to be eligible for repayment of medical debt under this section,
the following conditions must be met:
(1) the debtor shall be a Vermont resident who either has a household
income that is at or below 400 percent of the federal poverty level for the
applicable household size or who owes medical debt in an amount that is five
percent or more of the debtor’s household income; and
(2) the debtor’s patient account still maintains an outstanding balance
even after the health care provider has completed its routine efforts to collect
the amounts due.
Sec. 2. [Deleted.]

No. 21 Page 3 of 6
2025

VT LEG #383896 v.1
Sec. 3. 1 V.S.A. § 151 is added to read:
§ 151. BEHAVIORAL HEALTH
“Behavioral health” means any behavioral condition bearing on health,
including stress-linked physical symptoms, patient activation, and health
behaviors that can be addressed through support, counseling, change
techniques, coaching, and other interventions. As used in the Vermont Statutes
Annotated, the term does not include mental health conditions or substance use
disorders. The General Assembly recognizes that using the term “behavioral
health” to describe mental health conditions or substance use disorders has a
stigmatizing impact, which may deter individuals from seeking health care for
those conditions, but also recognizes that some jurisdictions interpret the term
to incorporate those conditions and that therefore it may be necessary under
limited circumstances to include the term in the definition of health care
services for the sole reason of avoiding any question about the intended scope
of a specific statute.
Sec. 4. 9 V.S.A. § 2466d is added to read:
§ 2466d. REPORTING OF MEDICAL DEBT INFORMATION
PROHIBITED
(a) A credit reporting agency shall not report or maintain in the file on a
consumer information relating to a medical debt.
(b) As used in this section:

No. 21 Page 4 of 6
2025

VT LEG #383896 v.1
(1) “Health care services” means all supplies, care, and services of a
medical, dental, behavioral health, mental health, substance use disorder
treatment, surgical, psychiatric, therapeutic, diagnostic, preventative,
rehabilitative, or supportive nature, including medication.
(2) “Medical debt” means debt arising from health care services,
including dental services, or from health care goods, including products,
devices, durable medical equipment, and prescription drugs. “Medical debt”
does not include debt arising from services provided by a veterinarian; debt
charged to a credit card unless the credit card is issued under an open-end or
closed-end credit plan offered solely for the payment of health care services;
debt charged to a home equity or general-purpose line of credit; or secured
debt.
Sec. 5. 9 V.S.A. § 2480b is amended to read:
§ 2480b. DISCLOSURES TO CONSUMERS
* * *
(c) Any time a credit reporting agency is required to make a written
disclosure to consumers pursuant to 15 U.S.C. § 1681g, it shall disclose, in at
least 12-point type, and in bold type as indicated, the following notice:
“NOTICE TO VERMONT CONSUMERS
* * *