Indiana has $2.2 billion in medical debt — the worst figure in the Midwest. A new bill just passed the Senate that could change what happens to Hoosiers who can’t pay their hospital bills.
What Senate Bill 85 does
The bill, sponsored by Sen. Ed Charbonneau (R-Valparaiso) and Sen. Fady Qaddoura (D-Indianapolis), creates several layers of protection for patients, according to reporting from WISH-TV And The Indiana Citizen:
Protection against wage garnishment
10%Maximum monthly payment
$2.2 billionIN Medical Debt
- Patients earning less than 200% of the federal poverty level (~$32,000/year for an individual) would fully shielded of wage garnishment due to medical debts
- Higher earners: creditors could only seize 10% of weekly disposable income above the 200% threshold (lower than 25% under current legislation)
Home protection
- No lien on your home for unpaid medical bills
- No forced house sales to pay off medical debts
Payment plan requirements
- Hospitals must offer payment plans to patients who earn below 400% of the federal poverty level (~$64,000/year) or when bills exceed 10% of monthly household income
- Plans must at least provide 24 months pay
- Monthly payments capped at 10% of the gross monthly income of the household
- Interest rates limited to 3% per year
Transparency of Charity Care
- Hospitals must prepare written notices about charity care programs
- Notices posted in emergency department waiting areas and provided upon admission/discharge
- Billing statements must include a statement that financial assistance is available, with a phone number and website
- Large hospitals (with a gross profit of $20 million+/year) must respond to eligibility questions within the EU 14 days
Indiana’s medical debt problem
According to the Indiana Community Action Poverty InstituteNearly one in five Hoosiers has medical debt in collections – an estimated total $2.2 billion statewide. The CFPB has reported that Indiana has the highest share of medical debt in the Midwest and the eleventh worst rate nationally.
The mood
SB 85 passed 33-15, splitting the Republican caucus: 23 Republicans voted yes alongside all ten Democrats, while 15 Republicans voted no. The bipartisan support signals real momentum, but the bill still must pass the Indiana House and be signed by Governor Mike Braun.
What opponents say
The Indiana Hospital Association has argued that inadequate health care coverage is the leading cause of medical debt. The Indiana Collectors Association expressed concern that treating medical debt differently than other debt could face legal challenges.
What this can mean for you
If you are in Indiana and struggling with medical bills, this bill is not yet law. But here’s what you can do 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 legislation
Use my Find Your Path tool for a personalized overview of your debt options.
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 of Representatives. If it passes the House, it will go to Governor Mike Braun for his signature.
Does Indiana’s Medical Debt Law End All Wage Garnishments?
Not quite. It would protect people making less than 200% of the federal poverty level (about $32,000 per year for an individual) from possible foreclosures. For those above that threshold, the garnishment would be limited to 10% of weekly disposable income above the threshold – down from 25% under current law.
Can hospitals put a lien on my home for medical debt in Indiana?
Under current legislation, yes. If SB 85 becomes law, hospitals would be prohibited from placing liens on primary residences or selling homes due to 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 about $2.2 billion statewide. Indiana has the highest medical debt in the Midwest.
(Source: WISH TV) (Source: The Indiana Citizen)
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