When Kristopher Shook was diagnosed with Stage 4 cancer at age 42, his primary focus was on beating the disease, regardless of the financial cost. As a result, he accumulated hundreds of thousands of dollars in debt. Diagnosed with two types of lymphoma—follicular lymphoma, an incurable cancer, and large B cell lymphoma, which is aggressive—Shook was given only a 15% chance of survival.

“There was no price tag on my life and I was willing to do whatever it took to survive,” Shook said. “I wasn’t concerned about the medical bills.”

The hospital provided him with two years to pay off the debt, but when he couldn’t meet the deadline, the hospital sold it to a collections firm, which added 12% interest. Shook faced threats of lawsuits, wage garnishment, and court action, feeling penalized for surviving cancer.

The Widespread Impact of Medical Debt

Shook’s situation is far from unique. Nationwide, about 20 million people, or nearly one in 12 Americans, owed $250 or more in medical debt in 2021, according to an analysis released last year. Medical debt is a leading cause of personal bankruptcy in America and has worsened since the COVID-19 pandemic.

In an effort to alleviate some of the negative effects of medical debt, Sen. Marcus Riccelli, D-Spokane, is sponsoring Senate Bill 5480, which aims to prevent medical debt from appearing on a person’s credit report. Riccelli emphasized that the bill is designed to help people in “really unfortunate situations” avoid snowballing financial difficulties.

“But we’re not trying to provide a path for folks to get around paying their obligations,” Riccelli said.

The bill passed the Senate on a 35-12 vote, with six Republicans voting with Democrats in favor. The legislation will next go to the House for consideration.

Federal Uncertainty and State Initiatives

The legislation comes amid uncertainty over a similar effort at the federal level. In early January, the Biden administration finalized a Consumer Financial Protection Bureau rule to prevent medical debt from appearing on credit reports. However, it has since been paused by the Trump administration and faces legal challenges.

Riccelli’s bill provides extra protections for Washington residents and goes further than the federal rule in certain ways, including preventing medical devices such as wheelchairs and prosthetics from being taken away from people if they don’t pay their debt on time.

Criticism and Industry Response

Sen. Keith Wagoner, R-Sedro-Woolley, criticized the bill, stating that it could enable further bad choices. “If you are already suffering from crushing debt, but it doesn’t have to be exposed, you now can take a future loan to put you further in debt and make life actually worse,” Wagoner said in a floor speech.

The Washington Collectors Association, an industry group for debt collectors, originally opposed the bill but adopted a neutral position after amendments.

Economic and Social Implications

Eliminating medical debt from credit reports could increase credit scores by an average of 20 points, according to the Consumer Financial Protection Bureau. A low credit score can cause a range of problems for people, including difficulties in renting an apartment or buying a home. Blemishes on a credit report can last for years.

Many people are underinsured and don’t know they qualify for charity care or financial assistance because hospitals often fail to screen for it. Even for those with insurance, expensive health care costs and high deductibles and copays can add up.

Shook always considered himself healthy, so he used a high-deductible health care plan where he paid low monthly costs for insurance. This resulted in higher out-of-pocket costs as he went through chemotherapy, scans, and follow-up care for his cancer.

In the first year after a leukemia diagnosis, care can cost almost half a million dollars, and drugs for cancer can be $10,000 per prescription, said Adam Zarrin, director of state government affairs for the Leukemia and Lymphoma Society. “I think that people want to save their lives and health care just costs too much,” Zarrin said. “There’s just not enough money in the world to pay off your medical bills.”

Recent Developments and Future Outlook

As the debate over medical debt continues, advocates and lawmakers are pushing for more comprehensive solutions. Recent developments include proposals for universal health care and expanded Medicaid programs, which could significantly reduce the financial burden on individuals.

Additionally, there is growing support for legislation that would require hospitals to provide clear and transparent information about financial assistance programs. This could help ensure that more people receive the help they need without facing overwhelming debt.

Case Study: The Impact of Medical Debt on Families

Consider the case of the Johnson family from Texas. John Johnson, a 55-year-old construction worker, was diagnosed with a rare form of cancer. Despite having health insurance, the family faced over $300,000 in medical bills. The financial strain led to the loss of their home and forced John’s wife to take on multiple jobs to make ends meet.

Stories like the Johnsons’ highlight the urgent need for reforms that address the root causes of medical debt. Advocates argue that without significant changes, more families will face financial ruin due to medical expenses.

Counterarguments and Criticisms

Critics of bills like Senate Bill 5480 argue that they could encourage irresponsible financial behavior. Some believe that removing medical debt from credit reports might lead to increased borrowing and further financial distress.

However, proponents counter that the current system disproportionately affects low-income individuals and families, exacerbating economic inequality. They argue that providing relief from medical debt can help stabilize families and communities, ultimately benefiting the broader economy.