RELATING TO MEDICAL DEBT.
SB3025 establishes a Medical Debt Acquisition and Forgiveness Program within the Office of Wellness and Resilience to buy and cancel qualifying medical debt owed by Hawaii residents. The bill is based on legislative findings that medical debt is widespread in the state, harms health and economic stability, and is often held by people who already have health insurance but still cannot pay. It authorizes the office to work with other state agencies, contract with experienced debt-acquisition entities, and use public, private, or federal funds to acquire debt identified as available for purchase.
The program is limited to residents meeting income-based eligibility criteria: households at or below 400 percent of the federal poverty level, and certain residents with adjusted gross income below $100,000 whose medical debt is at least 5 percent of household income. The bill also allows the office to use collected personal and health information only for debt acquisition and related support services, and requires confidentiality protections consistent with state and federal law. The office must report to the Legislature on program development and any proposed legislation by early 2027.
The bill appropriates $500,000 in general funds for fiscal year 2026-2027 to launch and administer the program, and the appropriation does not lapse until June 30, 2028 for unencumbered funds. It also creates a new statutory section in Chapter 346, Hawaii Revised Statutes, thereby adding a formal state program and authority for medical debt relief efforts. In practical terms, the bill would expand state involvement in purchasing and forgiving consumer medical debt and create a new public mechanism for debt cancellation.
Overall sentiment around the bill appears strongly supportive. It advanced through Senate Health and Human Services, Senate Ways and Means, and the conference committees with unanimous or near-unanimous votes and no recorded opposition in the provided history. The legislative findings frame the measure as a public health and economic stability response, and the lack of dissent in the vote history suggests broad agreement on the need for intervention.
The main points of contention, to the extent they are visible in the bill text, are not about whether medical debt is a problem but about implementation details: eligibility thresholds, use of public funds, confidentiality of sensitive information, and the decision to bypass certain procurement chapters when contracting with outside entities. The bill also implicitly raises questions about how much debt can be purchased and forgiven relative to available funding, and whether the state should rely on nonprofit debt-buying models versus other approaches to medical affordability.
SB3025 amends Chapter 346, Hawaii Revised Statutes, by adding a new section authorizing the Office of Wellness and Resilience to create and run a medical debt acquisition and forgiveness program. It gives the office authority to contract for debt acquisition, coordinate with other agencies, accept multiple funding sources, and protect personally identifiable and health information used in the program. The bill also appropriates $500,000 in general funds for startup and administration, and requires a progress report to the Legislature before the 2027 regular session.
The bill appears to have enjoyed broad bipartisan or at least cross-chamber support, with unanimous or near-unanimous committee and conference votes and no recorded opposition in the provided history. The findings section and final committee action suggest the measure was viewed as a public health and consumer relief initiative rather than a controversial policy change. The overall tone of the discussion reflected urgency about medical debt and support for a state-led solution.
No explicit opposition appears in the provided transcripts or vote records, but the bill’s structure suggests the likely areas of debate were policy design and administration rather than the underlying goal. Potential points of contention include the use of public funds to purchase private debt, the income and debt-burden eligibility thresholds, the decision to exempt contracting from certain procurement chapters, and the handling of confidential medical and financial information. Another possible concern is whether the $500,000 appropriation and any additional private or federal funds will be sufficient to meaningfully reduce the state’s medical debt burden.