Tennessee House Bill HB1859

Tennessee 2025-2026 Regular Session

• Introduced: 1/21/26
• Refer: 2/2/26

Caption

AN ACT to amend Tennessee Code Annotated, Title 4; Title 8; Title 9; Title 47, Chapter 18; Title 63; Title 68 and Title 71, relative to medical debt.

Impact

If enacted, this bill will significantly alter how medical debts are reported and handled in Tennessee. Starting July 1, 2026, healthcare providers will no longer report patients' medical debts to consumer reporting agencies, meaning that individuals will not have medical debts impacting their credit scores. This is a substantial shift considering how medical debt can affect creditworthiness, and it aims to provide a reprieve for many Tennessee residents burdened by medical expenses. However, providers will still be able to report debts to debt collection agencies, which may continue to present challenges for individuals in managing their financial health.

Summary

House Bill 1859, known as the 'Freedom from Medical Debt Act,' aims to address the issue of medical debt by enabling the state treasurer to contract with nonprofit entities to repay eligible medical debts on behalf of residents. Specifically, the bill mandates that eligible individuals—those whose gross annual household income is at or below 400% of the federal poverty level or those with medical debt exceeding 5% of their income—can have their medical debts purchased and repaid by nonprofit organizations. The bill establishes protocols for how these contracts should operate and ensures that upon repayment, adverse information regarding the medical debt is removed from the debtor's consumer report.

Contention

The bill has raised debates among various stakeholders. Supporters argue that this initiative will provide critical relief to many disadvantaged individuals facing insurmountable medical debt, fostering a healthier population and encouraging timely healthcare access without the fear of financial strain. Conversely, critics raise concerns about the potential financial implications for healthcare providers and the efficacy of relying on nonprofit entities to manage and absorb this debt. They question whether sufficient nonprofit resources exist to handle the expected scale of repayment required by the legislation, which could create sustainability issues in the long run.