At least 13 states now regulate medical debt interest rates, with protections ranging from complete bans to percentage-based caps. According to the Commonwealth Fund, as of 2026, at least 13 states regulate medical debt interest rates, with policies ranging from complete interest bans to percentage-based caps, representing a shift toward state-level protections after federal initiatives stalled.
These laws protect patients from compounding charges on medical bills, which remain the largest driver of personal bankruptcies in the U.S. Medical debt interest rules vary significantly by state—what's banned in one state may be capped at 3% in another. Understanding your state's protections helps you challenge incorrect charges and know what you legally owe.
Table of Contents
- States that ban medical debt interest entirely
- States with percentage-rate caps
- Income-based protections
- When state protections apply to your debt
- What to do if you're charged interest on protected medical debt
- Frequently Asked Questions
States that ban medical debt interest entirely
Delaware and Maine have taken the strongest approach: they completely prohibit interest and late fees on medical debt. Delaware's Medical Debt Protection Act completely bans interest and late fees on medical debt regardless of contractual agreements, with the law effective in the first half of 2024. Maine prohibits debt collectors from charging interest on medical debt and categorizes such charges as unfair and deceptive practices under its Fair Debt Collection Practices Act, effective in early 2024.
In these states, if a healthcare provider or debt collector adds interest to your medical bill, the charge violates state law. You can dispute it directly with the collector or provider.
States with percentage-rate caps
Most states that regulate medical debt interest set percentage caps rather than bans. Arizona voters approved a ballot initiative in 2022 capping medical debt interest rates at 3% annually or the weekly average one-year Treasury yield (whichever is lower), with the law taking effect December 2022 and applying even to judgments. Louisiana caps the annual interest rate on medical debt for "medically necessary care" at 3%, applied by both healthcare providers and debt collectors under a law enacted in 2026.
North Dakota limits medical services providers and hospitals to charging 1% monthly interest (not to exceed $25 per month) on extensions of credit for medical services. Washington state limits interest on medical debt accrued after December 31, 2026 to 1% simple interest annually when no written agreement exists, effective through Senate Bill 5993 passed in 2026. These caps vary because they reflect different legislative approaches—some focus on what providers can charge directly, others on what debt collectors can demand. check your state's specific rate to know the maximum you should owe.
Income-based protections
Connecticut takes a narrower approach. The state prohibits charging any interest to patients with incomes below 250% of the federal poverty level who are ineligible for public insurance programs. This targeted protection focuses on the patients least able to pay compounding charges. If you live in Connecticut and qualify by income, interest cannot legally be charged even if your medical provider's contract attempts to include it. Verify your eligibility and state it explicitly when disputing charges.
When state protections apply to your debt
Most of these laws protect only new medical debt—typically dated from the law's effective date forward. Delaware's ban, Maine's prohibition, Louisiana's 3% cap, and Washington's 1% limit all apply to debt incurred after their effective dates, so older bills may not qualify for protection. Arizona's cap applies retroactively even to judgments, making it broader than most state protections.
Check when your medical debt was incurred. If it predates your state's law, you have no legal protection under that statute, but you may still challenge the interest rate under other consumer protection laws or negotiate directly with collectors.
What to do if you're charged interest on protected medical debt
If you believe interest has been charged on debt that qualifies for protection under your state's law, gather your documentation: the original bill, any payment records, and written notice of interest charges. Contact the healthcare provider or debt collector in writing, citing the state law and effective date. If they do not remove the interest, file a complaint with your state's attorney general's office or the Consumer Financial Protection Bureau.
Keep copies of all correspondence. Some states consider improper interest charges a violation of their fair debt collection laws, which can give you grounds for damages in addition to having the interest removed.
Frequently Asked Questions
Does my old medical debt qualify for state interest protections?
Most state laws protect only debt incurred after the law's effective date. Arizona is an exception, with its cap applying even to judgments on older debt. Check your debt date against your state law's effective date.
What if a debt collector charges me interest that my state has banned?
Write to the collector citing the state law and request removal. If they refuse, file a complaint with your state attorney general or the Consumer Financial Protection Bureau.
Can I negotiate interest rates if my state hasn't banned or capped them?
You can always try to negotiate directly with your provider or a debt collector, but without state protection you have no legal requirement to remove interest unless you can prove the amount is unconscionable or violates other consumer laws.