Medical debt is the largest form of consumer debt in collections, with $88 billion recorded on credit reports, affecting roughly one in five US households. Medical debt pushes millions into financial distress and is exacerbated by harsh collection practices to garnish wages, seize assets, place liens on homes, and reduce creditworthiness. Concerned federal and state policymakers have pursued policies to protect consumers from medical debt.

Most federal medical debt policies are forms of public law – namely administrative requirements imposed by government on health care and consumer finance entities. Nevertheless, significant gaps in the federal public law of medical debt persist, leaving an important role for states, particularly in the creation of private enforcement actions for violations of state consumer protections against medical debt. States have created both public law and private law protections, prescribing standards for financial assistance, applying to a broader range of providers, barring certain collection actions, and empowering individuals to seek private remedies for violations.

Is medical debt better addressed at the federal or state level and using the tools public law or private law? The answer is all the above: Stronger national, public-law standards to guard against medical debt are critical, but federal policy should retain a vital role for what states do well – policy innovation and greater enforcement through private remedies. Preserving a meaningful role for states and private law in consumer protection policy enhances separation of powers and serves as a check against regulatory failure by federal public law solutions and the gutting of federal administrative and statutory authority.