ESSB 5993
In CommitteeSenate
Medical debt interest
Concerning lowering the interest rate for medical debt.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill bans interest charges on new and unpaid medical debt and shortens the time courts and creditors have to enforce judgments involving medical debt from 10 years to 6 years. It also limits interest on existing medical debt judgments to 9% and prevents extensions of medical debt liens.
- Prohibits charging or collecting interest on new or unpaid medical debt after the bill takes effect (previously allowed up to 12% per year).
- Limits interest on existing medical debt judgments to 9%, and stops any interest above 9% from accruing after July 28, 2019.
- Reduces the time period to enforce a court judgment that includes medical debt from 10 years to 6 years from the date of entry.
- Bars extension of judgment liens for medical debt — unlike other judgments, medical debt liens cannot be extended beyond 6 years.
- Defines a judgment as including medical debt if any portion of the principal at entry consists of medical debt, triggering the shorter enforcement period.
Who is affected
- Patients with medical debt — Patients who owe medical bills may no longer be charged interest on new or unpaid medical debt after the bill takes effect, and any existing medical debt judgments face shorter enforcement timelines.
- Healthcare providers and medical billing entities — Hospitals, clinics, and other healthcare providers may lose the ability to charge interest on medical debt and face shorter timeframes to collect on judgments involving medical debt.
- Debt collectors and collection agencies — Debt collectors and collection agencies that handle medical debt may face restrictions on how they can pursue collection, including limits on interest and shorter enforcement windows.
- State courts and court clerks — Courts and court clerks will need to adjust how they handle judgments involving medical debt, including applying shorter enforcement periods and not allowing extensions.
Pro/Con Analysis
Potential Benefits (5)
Banning interest on new and unpaid medical debt prevents debt from growing while patients are unable to pay — this directly protects low- and middle-income Washingtonians from predatory compounding interest, especially those facing job loss, chronic illness, or insurance disputes. The policy aligns with Washington’s existing consumer debt protections and reduces the risk of wage garnishment and bankruptcy.
FinancialPeopleRef: Sec. 1(2)(a)Limiting enforcement to 6 years and banning lien extensions reduces the risk of long-term asset loss (e.g., homes, vehicles) due to medical debt — this helps prevent foreclosure or repossession for families already under financial strain, especially those without significant assets or insurance coverage.
HousingPeopleRef: Sec. 2(9), Sec. 3Capping interest on existing judgments at 9% reduces the total financial burden on patients seeking follow-up care — this may improve healthcare access by reducing fear of accumulating unmanageable debt when returning to providers for necessary care, especially for chronically ill or low-income patients.
HealthcarePeopleRef: Sec. 1(2)(b)Reducing the time and complexity of medical debt enforcement may decrease the number of civil court filings and related legal proceedings — this could ease caseloads on courts and reduce involvement of law enforcement in civil debt collection, indirectly supporting community stability.
Public SafetyPeopleRef: Fiscal Impact sectionThe bill prevents medical debt from becoming a permanent lien on property — this protects homeowners and renters from long-term asset erosion, especially seniors and fixed-income households who may not have the liquidity to pay off large medical bills but own equity in homes.
FinancialLean peopleRef: Sec. 2(9)(c), Sec. 3
Potential Concerns (5)
Prohibiting interest on new and unpaid medical debt eliminates a revenue stream for healthcare providers and debt collectors, potentially reducing their ability to recover costs — but this primarily benefits patients who are already financially strained by medical bills, as interest often compounds debt beyond what many patients can repay. The policy directly reduces out-of-pocket costs for patients with medical debt, especially low- and middle-income individuals.
FinancialPeopleRef: Sec. 1(2)(a)Shortening the enforcement period for medical debt judgments from 10 to 6 years and banning extensions reduces the time creditors have to collect — this pressures providers and collectors to act faster, but disproportionately harms patients who may not have the financial literacy or resources to negotiate or pay off debts within the compressed window. However, the net effect is a reduction in debt collection abuse and overcollection, especially for vulnerable populations.
FinancialPeopleRef: Sec. 2(9), Sec. 3Capping interest on existing medical debt judgments at 9% (from up to 12%) reduces the total amount owed by patients who already have judgments — this helps prevent debt from spiraling out of control, especially for those who have been unable to pay due to low income or chronic illness. While it reduces creditor returns, it prevents deeper financial distress for patients.
FinancialPeopleRef: Sec. 1(2)(b)The bill reduces state revenue from interest income on medical debt judgments and court filing fees associated with extending judgments — this could reduce funding for court operations and related services, but the fiscal impact is modest and unlikely to significantly affect core public services, especially given the bill’s stated goal of reducing collection-related costs for state agencies.
Local GovernmentLean peopleRef: Fiscal Impact sectionHealthcare providers and debt collectors may face reduced revenue and increased administrative burden in identifying and tracking medical debt judgments — while this could strain small clinics and independent billing offices, large health systems and national collection agencies are better positioned to absorb the change, so the impact is concentrated on smaller providers.
Business & EmploymentLean peopleRef: Sec. 2(9)(c), Sec. 3
Who Is Most Affected
Patients with medical debt — especially low- and middle-income individuals, those without insurance, or those with high-deductible plans — benefit significantly from reduced debt accumulation and protection from long-term liens. This group is most likely to face wage garnishment, credit damage, or housing instability without this protection.
Small and mid-sized healthcare providers (e.g., clinics, independent practices) may face reduced revenue from interest income and shorter collection windows, increasing cash flow pressure. Larger health systems and billing contractors are better equipped to absorb these changes, so the burden falls disproportionately on smaller providers.
Debt collectors and collection agencies that specialize in medical debt will face operational constraints — shorter enforcement periods and interest caps reduce potential recovery, especially for older or larger balances. This may accelerate industry consolidation, favoring large national firms over local collection agencies.
Courts and clerks will need to update recordkeeping and enforcement protocols to distinguish medical debt judgments from other civil judgments — this adds administrative complexity but is unlikely to significantly strain resources, given the modest volume of medical debt judgments relative to total civil caseloads.
Low-income renters and homeowners may benefit from reduced risk of eviction or foreclosure due to medical debt liens — but only if they are already in debt; those without medical debt are unaffected. The policy does not address root causes of medical debt (e.g., high premiums, surprise billing), so benefits are limited to those already in financial distress.