Fifteen states have passed laws restricting medical debt on credit reports as of 2026, but the legal landscape shifted dramatically mid-2025—and these state protections may no longer be enforceable. In July 2025, a federal court ruled that federal law preempts state measures barring medical debt from credit reports, directly threatening all 15 state medical debt credit reporting bans. The states that passed these laws are California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia, and Washington. However, the July 2025 ruling and the CFPB's October 2025 interpretive rule reversing Biden-era guidance have cast serious doubt on whether these state laws remain in effect.
Table of Contents
- What the State Laws Actually Required
- The Federal Preemption Ruling That Changed Everything
- What Credit Bureaus Did Voluntarily
- What This Means for Readers Right Now
- The Enforcement Uncertainty Ahead
- Frequently Asked Questions
What the State Laws Actually Required
New York's Fair medical Debt Reporting Act (effective December 13, 2023) was among the strictest: it prohibited hospitals, healthcare professionals, and ambulance services from furnishing medical debt to consumer reporting agencies, and barred credit bureaus from including any medical debt information in consumer reports regardless of age. Colorado and California took a similar approach, with Colorado's House Bill 23-1126 (effective August 7, 2023) and California's Senate Bill 1061 (effective July 1, 2025) both restricting consumer reporting agencies from furnishing medical debt information.
These laws operated under the assumption that states could regulate credit reporting within their borders. Each approach targeted a link in the chain: some banned creditors from reporting medical debt, others told credit bureaus not to accept it, and others did both. The patchwork of state laws created varying protections depending on where a patient lived and received care.
The Federal Preemption Ruling That Changed Everything
On July 11, 2025, the landscape changed abruptly. A U.S. District Court for the Eastern District of Texas vacated the CFPB's federal rule that would have prohibited medical debt on credit reports, holding that the rule exceeded the CFPB's statutory authority under the Fair Credit Reporting Act. More significantly for state laws, the Texas federal court concluded that the Fair Credit Reporting Act expressly preempts state laws that restrict the reporting of coded medical debt information, directly threatening the enforceability of all 15 state medical debt credit reporting bans.
Three months later, the CFPB issued an interpretive rule on October 20, 2025 confirming that federal law preempts state measures barring medical debt from credit reports, reversing a Biden-era interpretation. This means that even if a state law is on the books, federal law may override it. Creditor groups are actively using the FCRA preemption finding to challenge state medical debt protections in court, creating uncertainty about whether these state laws remain enforceable.
What Credit Bureaus Did Voluntarily
Separate from any state law, the three major credit bureaus took independent action. Equifax, Experian, and TransUnion announced on April 11, 2023, that they would remove medical collections under $500 from consumer credit reports, and previously committed (July 1, 2022) to removing all paid medical debt regardless of amount. These voluntary actions mean that regardless of state law status, paid medical debt should already be removed from your report, and medical collections under $500 have been off credit reports since April 2023. If you live in one of the 15 states with a law, you may still have some protection, but whether state officials will enforce those laws when they are challenged remains uncertain.
What This Means for Readers Right Now
If you have medical debt and live in one of the 15 states with a law, your state may still offer protection—but do not assume it is guaranteed. The legal uncertainty created by the July and October 2025 rulings means that creditors and collection agencies may argue the state law no longer applies. Check your credit report directly through AnnualCreditReport.com.
If you see medical collections under $500 on your report, you have a clear claim to removal based on the April 2023 credit bureau policy. If you see paid medical debt, report it as an error because TransUnion, Equifax, and Experian committed to removing all paid medical debt starting July 1, 2022. Do not assume a state law will prevent medical debt from being reported—verify your own credit file and dispute inaccuracies.
The Enforcement Uncertainty Ahead
The current situation is legally unsettled. State attorneys general in states with medical debt laws have not yet announced coordinated enforcement against federal preemption challenges, though some state leaders have signaled they intend to defend their laws. If you are considering whether to rely on your state's law for protection, understand that it is being actively contested in court and the final outcome is not yet determined.
The safest strategy is to manage your medical debt before it reaches collections—negotiate with providers directly, seek financial assistance programs, or file a complaint with your state's attorney general's office if a medical debt reporting violation occurs. Your state law may still be your best protection, but it is now a contested legal question rather than settled fact.
Frequently Asked Questions
Does my state's medical debt law still protect me?
The legal status is uncertain. While 15 states have these laws on the books, a July 2025 federal court ruling found that federal law may preempt them, and creditor groups are actively challenging their enforceability in court.
Will medical debt be removed from my credit report?
Paid medical debt should be removed—the three major credit bureaus committed to this on July 1, 2022. Medical collections under $500 were removed starting April 11, 2023. Check your report and dispute any violations you see.
What should I do if I see medical collections on my credit report?
Pull your free credit report at AnnualCreditReport.com and verify the debt. If it is paid or under $500, dispute it as inaccurate. If your state is one of the 15 with a medical debt law, cite that law in your dispute letter.
Can my hospital or doctor still report my medical debt?
Federal law now may allow credit furnishing of medical debt, but your state law may still restrict it. The conflict remains unsettled in court, so check your state's attorney general's office for current guidance.