House Democrats introduce bill to ban medical-debt wage garnishment

Federal law allows garnishment of up to 25 percent of wages

House Democrats introduced legislation Monday that would bar debt collectors from garnishing workers’ wages to pay off medical bills, a practice that federal law currently permits in 45 states.

The bill, sponsored by Representatives Bobby Scott, Greg Casar, and Ilhan Omar, would amend the Fair Labor Standards Act of 1938 to add a ban on wage garnishment for medical debt and to prohibit any state or court from issuing or enforcing such orders.

“In the richest country in the world, medical debt should not be a threat to working people’s livelihood,” Bobby Scott, the ranking member of the House Committee on Education and Workforce and a co-author of the bill, said in a statement. “The American people should not have to slash spending on necessities to pay for life-saving care and no one should be denied future health care because of unpaid medical bills.”

Under current federal law, up to 25 percent of a worker’s take-home pay can be garnished for debt, or any amount above $217.50 — the equivalent of 30 times the federal minimum wage of $7.25 an hour. A 2023 study found that about 1 percent of American workers are experiencing wage garnishment for debt at any given time, with an average garnishment of about 10 percent of gross earnings, though it is unclear how much of that specifically relates to medical debt.

At least five states — New York, Pennsylvania, Texas, Delaware, and North Carolina — have already prohibited wage garnishment for medical debt, and legislators in several other states have introduced bills this year to do the same.

“In 45 states, some workers have a portion of their take-home pay forcibly cut to pay off medical debt,” Ilhan Omar, a co-author of the bill, said in a statement. The bill ensures “no worker is thrown into further financial hardship over often-predatory debt.”

The sponsors cited figures showing that over 100 million Americans carry a combined $220 billion in medical debt, and that as many as 550,000 people annually cite medical bills as the reason they filed for bankruptcy.

The financial toll extends beyond wage garnishment. A 2022 survey by the Kaiser Family Foundation found that more than six in 10 U.S. households had cut back on basic necessities because of medical debt, with 48 percent reporting they used most or all of their savings to pay it off. A separate 2026 Kaiser Family Foundation poll found that more than one-third of Americans reported skipping medical care in the past 12 months because of cost.

“Nobody should lose their wages because they got sick,” Greg Casar, a co-author of the bill, said in a statement. “Trump and Republicans ripped health care away from millions of Americans to pay for tax cuts for billionaires. Now families who get sick are being hit with bills they can’t pay, and in most states a hospital or debt collector can take a cut of their paycheck before they ever see it. This needs to end.”

The bill arrives against a backdrop of rising health costs and shrinking insurance coverage. Health premiums have risen 20 percent in 2026 since the Trump administration allowed Affordable Care Act subsidies to expire, with another 15 percent increase projected for 2027, according to The Guardian. More than 8 million Americans have lost health insurance between 2025 and 2026, the paper reported, attributing the losses to the administration’s Medicaid cuts and the subsidy expirations.