WILMINGTON, Del. — A new law aimed at reducing the long-term financial burden of illness has taken effect in Delaware, barring credit reporting agencies from including medical debt on consumer credit reports.
Governor Matt Meyer signed Senate Bill 156 into law in July, and as of today, it is officially active. The law prevents medical debt from being used to calculate credit scores, a change that state leaders say will offer financial relief and stability to thousands of people who live in Delaware.
“When we remove barriers like medical debt from the equation, we strengthen Delaware’s families, communities, and economy,” Meyer said during the bill signing. “With this law now in effect, we’re helping thousands of Delawareans breathe a little easier and ensure that no one’s financial future is destroyed because they got sick or needed care.”
Sponsored by Sen. Spiros Mantzavinos and Rep. Kim Williams, the bill passed unanimously through the Delaware General Assembly. Supporters of the measure say it expands the protections under the state’s existing Medical Debt Protection Act.
“When it comes to medical debt, we are all just one accident or one diagnosis away from being in an entirely catastrophic financial position,” said Mantzavinos. “That’s why I am glad that SB 156 is going into effect — especially now, as we approach the beginning of open enrollment with the threat of higher medical insurance costs for many Americans.”
Rep. Williams emphasized the timing, pointing to the upcoming end of Affordable Care Act subsidies and the rising cost of care. “It gives thousands of Delawareans a fresh start and eases the weight of medical debt, something that’s often beyond a person’s control,” she said.
The law takes effect as the state rolls out a partnership with the nonprofit Undue Medical Debt. That partnership will use $500,000 in public funds to eliminate as much as $50 million in medical debt for over 17,000 Delawareans.
The governor's team says letters notifying eligible people that their debt has been eliminated will begin arriving in the coming weeks. No application process is required. To qualify, recipients must have an income below 400% of the federal poverty level — about $100,000 for a family of three — or have medical debt that is more than 5% of their income.
The effort is part of Governor Meyer’s fiscal year 2026 budget.
According to Governor Meyer's team, more than 100 million Americans currently have medical debt, which often lowers their credit scores and impacts access to housing, loans, and jobs.