By Rep. Carol Ode
The Legislature this year unanimously passed a new law that will erase up to $100 million in medical debt—with no new taxes or fees. I co-sponsored this bill, and my House Ways and Means Committee played a role in reviewing and advancing it. The Governor signed it into law on May 15.
How it works:
The state partners with a nonprofit that buys medical debt from hospitals at a small fraction of the original amount. Once purchased, the debt is completely forgiven, and any negative credit impacts are removed. Vermonters are enrolled automatically—no forms or applications.
Who qualifies:
Eligibility includes Vermonters with medical debt in “terminal bad debt” status or those who meet income guidelines. Households earning up to 400% of the Federal Poverty Level qualify. For 2025, that’s roughly:
- $62,600 for a single person
- $84,600 for two people
- $106,600 for a family of three
- $128,600 for a family of four
Households also qualify if medical debt equals or exceeds 5% of their annual income.
Medical debt affects more than 60,000 Vermonters, and many delay or skip needed care because they fear the cost. Health leaders say this relief will improve both financial stability and health outcomes across the state.
The program is funded through a one-time $1 million allocation already appropriated to the Treasurer’s Office, so it does not increase taxes or fees. The debt-relief program is expected to roll out later this year, with more details coming from the Treasurer’s Office.
The author, a Democrat, is the Vermont House member for Chittenden-18, Burlington’s Far New North End.