The fight against medical debt is pivoting to the states after Trump's election

Elon Musk, who will have a role in the Trump administration to shrink government, tweeted "Delete CFPB" — that is the watchdog agency that has been working to protect people from medical debt.
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Worried that President-elect Donald Trump will curtail federal efforts to take on the nation's medical debt problem, patient and consumer advocates are looking to states to help people who can't afford their medical bills or pay down their debts.

"The election simply shifts our focus," said Eva Stahl, who oversees public policy at Undue Medical Debt, a nonprofit that has worked closely with the Biden administration and state leaders on medical debt. "States are going to be the epicenter of policy change to mitigate the harms of medical debt."

Good insurance is a defense against debt

New state initiatives may not be enough to protect Americans from medical debt if the incoming Trump administration and congressional Republicans move forward with plans to scale back federal aid that has helped millions gain health insurance or reduce the cost of their plans in recent years.

Comprehensive health coverage that limits patients' out-of-pocket costs remains the best defense against medical debt.

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But in the face of federal retrenchment, advocates are eyeing new initiatives in state legislatures to keep medical bills off people's credit reports, a consumer protection that can boost credit scores and make it easier to buy a car, rent an apartment, or even get a job.

Several states are looking to strengthen oversight of medical credit cards and other financial products that can leave patients paying high interest rates on top of their medical debt.

Some states are also exploring new ways to compel hospitals to bolster financial aid programs to help their patients avoid sinking into debt.

New York out ahead on the issue

"There's an enormous amount that states can do," said Elisabeth Benjamin, who leads health care initiatives at the nonprofit Community Service Society of New York. "Look at what's happened here."

New York state has enacted several laws in recent years to rein in hospital debt collections and to expand financial aid for patients, often with support from both Democrats and Republicans in the legislature. "It doesn't matter the party. No one likes medical debt," Benjamin said.

Other states that have enacted protections in recent years include Arizona, California, Colorado, Connecticut, Florida, Illinois, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, and Washington. Many measures picked up bipartisan support.

President Biden's administration has proved to be an ally in state efforts to control health care debt. Such debt burdens 100 million people in the United States, an NPR and KFF Health News investigation found.

Led by Biden appointee Rohit Chopra, the Consumer Financial Protection Bureau has made medical debt a priority, going after aggressive collectors and exposing problematic practices across the medical debt industry. Earlier this year, the agency proposed landmark regulations to remove medical bills from consumer credit scores.

The White House also championed legislation to boost access to government-subsidized health insurance and to cap out-of-pocket drug costs for seniors, both key bulwarks against medical debt.

Regulatory overreach?

Trump hasn't indicated whether his administration will move ahead with the CFPB credit reporting rule, which was slated to be finalized early next year. Congressional Republicans, who will control the House and Senate next year, have blasted the proposal as regulatory overreach that will compromise the value of credit reports.

And Elon Musk, the billionaire whom Trump has tapped to lead his initiative to shrink government, last week called for the elimination of the watchdog agency. "Delete CFPB," Musk posted on X.

If the CFPB withdraws the proposed regulation, states could enact their own rules, following the lead of Colorado, New York, and other states that have passed credit reporting bans since 2023. Advocates in Massachusetts are pushing the legislature there to take up a ban when it reconvenes in January.

"There are a lot of different levers that states have to take on medical debt," said April Kuehnhoff, a senior attorney at the National Consumer Law Center, which has helped lead national efforts to expand debt protections for patients.

Kuehnhoff said she expects more states to crack down on medical credit card providers and other companies that lend money to patients to pay off medical bills, sometimes at double-digit interest rates.

Under the Biden administration, the CFPB has been investigating patient financing companies amid warnings that many people may not understand that signing up for a medical credit card such as CareCredit or enrolling in a payment plan through a financial services company can pile on more debt.

If the CFPB efforts stall under Trump, states could follow the lead of California, New York, and Illinois, which have all tightened rules governing patient lending in recent years.

A focus on financial aid

Consumer advocates say states are also likely to continue expanding efforts to get hospitals to provide more financial assistance to reduce or eliminate bills for low- and middle-income patients, a key protection that can keep people from slipping into debt.

Hospitals historically have not made this aid readily available, prompting states such as California, Colorado, and Washington to set stronger standards to ensure more patients get help with bills they can't afford. This year, North Carolina also won approval from the Biden administration to withhold federal funding from hospitals in the state unless they agreed to expand financial assistance.

In Georgia, where state government is entirely in Republican control, officials have been discussing new measures to get hospitals to provide more assistance to patients.

"When we talk about hospitals putting profits over patients, we get lots of nodding in the legislature from Democrats and Republicans," said Liz Coyle, executive director of Georgia Watch, a consumer advocacy nonprofit.

Many advocates caution, however, that state efforts to bolster patient protections will be critically undermined if the Trump administration cuts federal funding for health insurance programs such as Medicaid and the insurance marketplaces established through the Affordable Care Act.

Trump and congressional Republicans have signaled their intent to roll back federal subsidies passed under Biden that make health plans purchased on ACA marketplaces more affordable. That could hike annual premiums by hundreds or even thousands of dollars for many enrollees, according to estimates by the Center on Budget and Policy Priorities, a think tank.

And during Trump's first term, he backed efforts in Republican-led states to restrict enrollment in their Medicaid safety net programs through rules that would require people to work in order to receive benefits. GOP state leaders in Idaho, Louisiana, and other states have expressed a desire to renew such efforts.

"That's all a recipe for more medical debt," said Stahl, of Undue Medical Debt.

Jessica Altman, who heads the Covered California insurance marketplace, warned that federal cuts will imperil initiatives in her state that have limited copays and deductibles and curtailed debt for many state residents.

"States like California that have invested in critical affordable programs for our residents will face tough decisions," she said.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF .