Quick Answer: The Indiana Senate passed Senate Bill 85 on January 29, 2026, by a 33-15 vote. The bill would protect patients from wage garnishment on medical debt if they earn under 200% of the federal poverty level (~$32,000/year), ban home liens for medical bills, require hospitals to offer 24-month payment plans capped at 10% of monthly income, and mandate charity care transparency. It now heads to the Indiana House.
Update (April 2026): Washington just hit a medical debt collector with a $1.5M penalty — new developments that affect what I wrote below.
Indiana has $2.2 billion in medical debt—the worst rate in the Midwest. A new bill just cleared the Senate that could change what happens to Hoosiers who can’t pay their hospital bills.
What Senate Bill 85 Does
Sponsored by Sen. Ed Charbonneau (R-Valparaiso) and Sen. Fady Qaddoura (D-Indianapolis), the bill creates several layers of protection for patients, according to reporting from WISH-TV and The Indiana Citizen:
Wage Garnishment Protections
- Patients earning below 200% of the federal poverty level (~$32,000/year for an individual) would be completely shielded from wage garnishment for medical debt
- Higher earners: creditors could only garnish 10% of weekly disposable income above the 200% threshold (down from 25% under current law)
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Home Protection
- No liens on your home for unpaid medical bills
- No forced home sales to satisfy medical debt
Payment Plan Requirements
- Hospitals must offer payment plans to patients earning below 400% of the federal poverty level (~$64,000/year) or when bills exceed 10% of monthly household income
- Plans must offer at least 24 months to pay
- Monthly payments capped at 10% of gross monthly household income
- Interest rates limited to 3% annually
Charity Care Transparency
- Hospitals must develop written charity care program notices
- Notices posted in emergency room waiting areas and provided at intake/discharge
- Billing statements must include a statement that financial assistance is available, with a phone number and website
- Large hospitals (grossing $20M+/year) must respond to eligibility inquiries within 14 days
Why This Matters: As Sen. Charbonneau told fellow legislators, payment plan information is typically buried in discharge documents. Many patients don’t even know payment plans or charity care exist. This bill makes hospitals tell them up front.
Indiana’s Medical Debt Problem
According to the Indiana Community Action Poverty Institute, nearly one in five Hoosiers has medical debt in collections—totaling an estimated $2.2 billion statewide. The CFPB has reported that Indiana has the highest share of medical debt in the Midwest and the 11th worst rate nationally.
The Vote
SB 85 passed 33-15, splitting the Republican caucus—23 Republicans voted yes alongside all 10 Democrats, while 15 Republicans voted no. The bipartisan support signals real momentum, but the bill still needs to pass the Indiana House and be signed by Governor Mike Braun.
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What Opponents Say
The Indiana Hospital Association has argued that inadequate health care coverage is the root cause of medical debt. The Indiana Collectors Association expressed concern that treating medical debt differently from other debt could face legal challenges.
What This Could Mean for You
If you’re in Indiana and struggling with medical bills, this bill hasn’t become law yet. But here’s what you can do right now:
- Ask your hospital about charity care—most hospitals already have programs, even if they don’t advertise them
- Request a payment plan—many hospitals will negotiate, especially if you ask
- Check if you qualify for Medicaid—Indiana expanded Medicaid under the ACA
- Don’t ignore medical bills—they can still go to collections under current law
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Frequently Asked Questions
Has Indiana SB 85 become law yet?
No. It passed the Indiana Senate on January 29, 2026, and now heads to the House. If it passes the House, it goes to Governor Mike Braun for his signature.
Does the Indiana medical debt bill stop all wage garnishment?
Not entirely. It would protect people earning below 200% of the federal poverty level (about $32,000/year for an individual) from any garnishment. Those above that threshold would have garnishment limited to 10% of weekly disposable income above the threshold—down from 25% under current law.
Can hospitals put a lien on my house for medical debt in Indiana?
Under current law, yes. If SB 85 becomes law, hospitals would be prohibited from placing liens on primary residences or forcing home sales for medical debt.
How much medical debt does Indiana have?
According to the Indiana Community Action Poverty Institute, nearly one in five Hoosiers has medical debt in collections, totaling approximately $2.2 billion statewide. Indiana has the worst medical debt rate in the Midwest.
TL;DR: Indiana’s Senate passed SB 85 to protect patients from medical debt collectors. Key provisions: no wage garnishment under $32K income, no home liens, 24-month payment plans capped at 10% of income, and mandatory charity care transparency. The bill heads to the House next. If you’re in Indiana with medical debt, ask your hospital about charity care and payment plans—they often have options they don’t advertise.
(Source: WISH-TV) (Source: The Indiana Citizen)
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