Hawaii lawmakers have put a major medical debt relief plan on Gov. Josh Green's desk, and if he signs it, roughly 50,000 residents could see about $91 million in old medical bills simply vanish.
The bill would let the state buy up qualifying medical debt at steep discounts, then forgive it through a new Medical Debt Acquisition and Forgiveness Program run by the Office of Wellness and Resilience. Lawmakers set aside an initial $500,000 to launch the effort, banking on the idea that a relatively small public investment can unlock massive relief once the state starts purchasing bundled, overdue accounts.
As reported by Hawaii News Now, a University of Hawaii and Office of Wellness and Resilience survey identified about $91 million in outstanding medical bills statewide and found that roughly 19% of families owe more than $500. State Sen. Chris Lee has called the plan "life-changing" for households trying to dig out from under those balances, while Tia Hartsock of the Office of Wellness and Resilience warned that many people are delaying needed care because they simply cannot afford the bills that follow. Community partners also pointed out that unpaid medical debt can land on credit reports and block access to housing or other loans.
What's in the bill
Senate Bill 3025 authorizes the Office of Wellness and Resilience to design and administer the new medical debt acquisition and forgiveness program and formally appropriates $500,000 to get it off the ground. The measure spells out who would qualify: households at or below 400% of the federal poverty level, or households with adjusted gross income under $100,000 whose medical debt equals at least 5% of their income.
The bill text also notes that a nonprofit has already acquired unpaid medical debt for 50,016 Hawaii residents, totaling $91,310,664, demonstrating the scale of obligations sitting in collections portfolios, according to LegiScan.
How debt would be erased
Under SB3025, the Office of Wellness and Resilience could contract with organizations that specialize in acquiring bundled or dormant medical accounts. Instead of collecting on those debts, the state-backed program would satisfy or forgive them, effectively canceling balances that might otherwise haunt families for years.
This model relies on the fact that older medical debt is often sold for pennies on the dollar. That lets a modest appropriation translate into far larger amounts of erased debt, a strategy that has already been used by other states and cities. State Health and Value Strategies has tracked similar initiatives and the policy choices states face when deciding how to structure and target these buy-and-forgive programs.
Who could benefit
To qualify, SB3025 uses the 400% federal poverty level cutoff, which is roughly $140,000 for a Hawaii family, or the 5%-of-income debt threshold, according to LegiScan. Advocates say that wiping out medical debt overnight can immediately improve credit scores and free up cash for rent, transportation and savings.
"Having this medical debt on your credit report may prevent you from getting housing," Matt Prellberg told Hawaii News Now, underscoring how a hospital bill from years ago can still derail a rental application today. Supporters also note that, if the program is implemented as written, much of the relief could happen automatically by working directly with account holders and credit reporting systems, without requiring individual consumers to navigate a separate application process.
What happens next
The Legislature formally enrolled SB3025 to the governor on May 8, 2026, and the bill specifies an effective date of July 1, 2026, if it is signed. According to LegiScan, backers say that once Gov. Green approves the measure, the Office of Wellness and Resilience could move quickly to line up contractors and have the program operating next year, converting that $500,000 appropriation into widespread medical debt relief across the state.
