Washington state considers ending interest on medical debt

Shauna Sowers, The Seattle Times on Jan 21, 2026

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OLYMPIA, Wash. — As lawmakers pursue bills to zero in on affordability issues gripping households across the state, a Democratic measure in the Legislature seeks to curb the financial strain of medical expenses by proposing to eliminate interest charges on new and unpaid medical debt incurred in Washington.

Senate Bill 5993, sponsored by state Sen. Emily Alvarado, D-West Seattle, and several other Senate Democrats, received its first public hearing Monday in the Senate Law and Justice Committee.

“Addressing interest on medical debt is a key way that we can help families address the cost of living and increase access to health care,” Alvarado told The Seattle Times.

The proposal comes as states across the country reassess how medical debt affects household finances, credit access and economic stability. If the bill passes this session, Washington would join other states, like Maine and Delaware, that prohibit any interest on medical debt.

Washington passed legislation in 2019 to cap medical debt interest at 9%. Alvarado noted that other states like New Jersey, North Dakota and Virginia have recently dialed back their rates to between 1% and 3%.

Several testified in favor of the proposal Monday.

Kris Shook, a Tacoma resident and business owner, told the committee he never imagined he'd be diagnosed with two types of stage 4 cancer at the same time and said medical debt was the last thing on his mind as he fought for his life. But because he could not pay off the debt he accrued during treatment quickly enough — and because it was incurred before the 2019 interest change, the debt was sold to a firm that charged him 12% interest on top of the hundreds of thousands of dollars he already owed. He said later he was threatened with lawsuits, wage garnishment and court action.

“This is one example of how medical debt spirals out of control and can devastate individuals and families,” Shook said.

One of Shook's cancers is incurable, meaning he will require medical care for the rest of his life. On top of paying for a health care plan, he remains on the hook for past medical debts that continue to accrue interest. Thirteen years after his diagnosis, he told lawmakers he is still dealing with the financial fallout.

Consumer and legal advocacy groups like the Northwest Consumer Law Center, the Northwest Justice Project and AARP also testified in support and urged lawmakers to pass the measure, while opponents warned of potential consequences for providers and the health care system.

Last year, Washington lawmakers passed legislation that prohibits credit reporting agencies from reporting medical debt on credit scores. A similar rule enacted nationally by former President Joe Biden was rolled back after President Donald Trump took office.

Lisa Thatcher with the Washington State Hospital Association said that law made medical debt “void and unenforceable.” Thatcher said the organization opposes the proposed legislation because small rural hospitals are more financially vulnerable and “the interest on medical debt is important.” Medical debt, she said, is like a loan for those who can’t pay at the moment for services rendered, and “allows people to pay smaller amounts over a longer period of time.”

“If you take that away, there might be some unintended consequences,” she said. “You have to realize that there is debt out there, and when money is not paid, there is an impact to those providers that have provided those services.”

Other medical groups like the Washington State Medical Association, the Washington State Dental Association and the Northwest Collectors Association testified against the proposal.

During testimony, they warned that eliminating interest could “socialize” the cost and lead to higher rates for others. Alvarado pushed back, saying families are willing to pay for care they’ve received, but “charging high interest rates on the cost of that care makes it harder for many families to pay.”

“I don't think there is compelling evidence to show that having a high interest rate increases the likelihood that someone is going to pay,” she said.

The proposal is scheduled for a possible vote Thursday. If passed and signed by the governor, the law would go into effect 90 days after the legislative session ends on March 12.

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