Wisconsin would fund buying and canceling eligible residents’ medical debt

The Wisconsin Department of Health Services would buy and cancel medical debt itself or hire an experienced nonprofit to do so. Wisconsin residents would qualify based on either their annual household income or the size of their debt from health care services. Providers and debt collectors would have to agree to sell the debt. Eligibility alone would not guarantee relief. Outreach would start with hospitals the department designates as safety-net hospitals. Purchases would prioritize providers serving many Medical Assistance patients and providers in ZIP codes disproportionately affected by medical debt. The department or its nonprofit contractor would minimize the tax effects of cancellation and could not seek repayment from residents. Funding would cover fiscal years 2025–26 and 2026–27. Residents would receive notice within 60 days after their purchased debt is canceled.

Taxpayers would exclude debt canceled through the medical debt program when calculating Wisconsin income tax. The exclusion would apply to tax years beginning after December 31, 2025.

The Wisconsin Department of Health Services would report each year to the governor and relevant legislative committees. Reports would cover the previous year’s canceled debt, residents receiving relief, and providers selling debt. They would include residents’ backgrounds and providers’ locations and patient insurance coverage. Annual reporting would begin on the first day of the 13th month beginning after the reporting provision takes effect.