Indiana Medical Bill Rights: Statute of Limitations, Garnishment Limits, and Debt Protections (2026)

Indiana has $2.2 billion in medical debt, and roughly 1 in 5 residents carry medical bills in collections. One new law enacted in 2026, SB 225 (Public Law 124, effective July 1, 2026), changes the landscape: a hospital found noncompliant with Indiana's price transparency statutes can be barred from pursuing your medical debt, and you have an affirmative defense if collection was attempted during a noncompliant period. A companion bill, SB 85, would have capped wage garnishment, barred home liens, and required payment plans, but it passed the Senate and then died in the House in the 2026 session, so those protections are not law. This guide covers every protection available to you.

Indiana Patient Protections at a Glance

SB 225: Transparency Shield (2026)

Hospitals violating price transparency cannot collect your debt

Garnishment Limits (Current Law)

Medical judgments follow the federal cap: the lesser of 25% of disposable earnings or the amount over 30x the minimum wage

Homestead Exemption Protects Home Equity

Indiana's homestead exemption protects $22,750 of home equity per person (IC 34-55-10-2) from judgment liens

Nonprofit Hospital Financial Assistance (federal 501(r))

Hospitals must offer payment plans to low/moderate-income patients

HIP 2.0 Coverage (up to 138% FPL)

Indiana's Medicaid waiver program with POWER Account contributions

6-Year Statute of Limitations

Six years for medical debt (IC 34-11-2-9). Partial payments can restart it.

New 2026 Law: SB 225 (Enacted), and What Happened to SB 85

SB 225: Pricing Transparency Shield (Signed March 2026)

SB 225 creates a direct connection between hospital pricing transparency and debt collection rights. If a hospital failed to comply with Indiana's pricing transparency requirements, it is prohibited from pursuing medical debt collection against you for services provided during the period of non-compliance.

What it blocks: Lawsuits, collection agency referrals, wage garnishment, credit reporting, and liens for debt from non-compliant periods
What hospitals must do: Publish machine-readable pricing files with negotiated rates for all services, per CMS and state requirements
How to use this: Before paying a large bill, check if the hospital has published its pricing data. If not, cite SB 225 in a written dispute
Key detail: A 2024 PatientRightsAdvocate.org study found that only 24.5% of hospitals nationwide fully comply with transparency rules, giving this law broad potential impact

SB 85: Garnishment Caps, Payment Plans, and Home Protection (2026)

SB 85 would have been a comprehensive medical debt protection law addressing three of the most aggressive collection tactics hospitals use, with graduated protections based on income level. It passed the Senate but then died in the House during the 2026 session, so the provisions below did not become law. Here is what it would have done, and what currently applies instead.

Would have (did not pass): No wage garnishment for medical debt under 200% FPL, and a 10% cap above that
Current garnishment law: Medical debt follows the federal cap, the lesser of 25% of weekly disposable earnings or the amount by which they exceed 30 times the federal minimum wage (IC 24-4.5-5-105). A court may reduce it to as low as 10% for good cause.
Would have (did not pass): A ban on hospital liens against your primary residence for medical debt. Home equity is instead protected by Indiana's homestead exemption ($22,750 per person, IC 34-55-10-2).
Would have (did not pass): Mandatory structured payment plans for low and moderate-income patients before any collection activity

Garnishment: What SB 85 Proposed vs. Current Law:

Income Level	SB 85 Proposal (did not pass)	Current Law (IC 24-4.5-5-105)
Under 200% FPL	No garnishment	Federal cap: lesser of 25% of disposable earnings or amount over 30x minimum wage
200% to 400% FPL	Capped at 10%	Federal cap: up to 25% (court may lower to 10% for good cause)
Above 400% FPL	Capped at 10%	Federal cap: up to 25% (court may lower to 10% for good cause)

Indiana Hospital Financial Assistance Programs

All nonprofit hospitals in Indiana must offer financial assistance (charity care) under federal 501(r) rules. Because nonprofit hospitals must offer financial assistance under 501(r) and many provide payment plans, patients have real leverage. Below are the major Indiana hospital systems and what they offer.

IU Health (Indiana University Health)

Indiana's largest hospital system with 16 hospitals statewide, including Methodist, University, and Riley Children's Hospital in Indianapolis.

Free care: Available to patients with income up to 200% FPL (~$30,120/year for a single person)
Discounted care: Sliding scale discounts for patients from 200% to 400% FPL
Payment plans: Interest-free payment plans available for remaining balances
How to apply: Call IU Health Financial Assistance at 1-800-265-3220 or ask for an application at any IU Health facility

Ascension St. Vincent

Major Catholic health system operating 14 hospitals across Indiana, with the flagship St. Vincent Hospital in Indianapolis.

Free care: Patients at or below 250% FPL (~$37,650/year single) qualify for 100% charity care
Discounted care: Sliding scale discounts typically extend to 400% FPL
Application window: You can apply retroactively up to 240 days after the first billing statement
How to apply: Visit Ascension financial assistance or call the number on your bill

Franciscan Health

Catholic health system with hospitals in Indianapolis, Crown Point, Lafayette, Michigan City, Mooresville, Munster, and surrounding areas.

Free care: Typically available to patients at or below 200% FPL
Discounted care: Partial discounts for patients up to 300% to 400% FPL based on family size and medical expenses
How to apply: Request a financial assistance application from the billing department or patient financial services

Community Health Network

Central Indiana-based nonprofit system with hospitals in Indianapolis, Anderson, and surrounding communities.

Free care: Available for patients at or below 200% FPL
Discounted care: Reduced pricing for patients up to 400% FPL
How to apply: Call 1-800-777-7775 or visit any Community Health Network patient registration desk

Parkview Health

Northeast Indiana's largest health system, based in Fort Wayne with hospitals in Allen, DeKalb, Huntington, LaGrange, Noble, Wabash, and Whitley counties.

Free care: Patients at or below 200% FPL qualify for full charity care
Discounted care: Sliding scale up to 300% to 400% FPL depending on the service
How to apply: Call Parkview Financial Counseling or request an application at any Parkview facility

Pro Tip: Every nonprofit hospital in Indiana must have a financial assistance policy, and they cannot send you to collections without first informing you of this program. If a hospital sent your bill to collections without telling you about financial assistance, this may be a violation of federal 501(r) rules. Document this and include it in your dispute.

HIP 2.0 (Healthy Indiana Plan): Indiana's Unique Medicaid Alternative

What is HIP 2.0?

Indiana did not expand traditional Medicaid under the ACA. Instead, it operates the Healthy Indiana Plan (HIP 2.0) under a federal waiver. HIP 2.0 covers adults aged 19 to 64 with income up to 138% of the Federal Poverty Level (about $20,783/year for a single person in 2026). The key difference from regular Medicaid is the POWER Account.

POWER Account: A personal health account similar to an HSA. Members contribute $1 to $27 per month based on income. The state matches contributions.
HIP Plus: Members who make monthly POWER Account contributions receive enhanced benefits including vision, dental, and lower copays
HIP Basic: Members who do not make contributions still receive coverage but with a more limited benefit package (no vision or dental) and higher copays
Income under 100% FPL: Members cannot be locked out for non-payment of POWER Account contributions
Income 100% to 138% FPL: Missing POWER Account payments can result in a 6-month lockout period. Pay these on time.

How to Apply for HIP 2.0

Online: Apply at in.gov/fssa/hip or through the federal marketplace at Healthcare.gov
By phone: Call the HIP hotline at
In person: Visit your local Division of Family Resources (DFR) office
Retroactive coverage: HIP 2.0 can cover bills up to 3 months before your application date if you were eligible during that time

HIP 2.0 POWER Account Contributions:

Income Level	Monthly Contribution	Non-Payment Consequence
Under 100% FPL	$1/month	Downgrade to HIP Basic (no lockout)
100% to 138% FPL	$1 to $27/month (varies by income)	6-month lockout from coverage

Debt Collection Protections in Indiana

Wage Garnishment Rules (Updated 2026)

Medical debt garnishment: Follows the federal cap, garnishment cannot exceed the lesser of 25% of weekly disposable earnings or the amount by which they exceed 30 times the federal minimum wage (IC 24-4.5-5-105)
Good-cause reduction: A court may reduce garnishment to as low as 10% of disposable earnings for good cause, but the standard maximum is 25% (IC 24-4.5-5-105)
SB 85 did not change this: SB 85 proposed lower, income-based medical debt garnishment caps, but it died in the House during the 2026 session, so the federal cap still governs

Primary Residence Lien Protection

SB 85 (2026): This bill, which would have prohibited liens on your primary residence for medical debt, passed the Senate but died in the House, so no such prohibition is currently law. Home equity is instead protected by Indiana's homestead exemption.
Hospital lien statute (IC 32-33-4): Indiana does have a hospital lien law that allows liens on personal injury settlement proceeds (e.g., car accident cases). It does not reach your home.
Homestead exemption: Indiana's homestead exemption is $22,750 per person (IC 34-55-10-2), which protects home equity from other types of judgments

6-Year Statute of Limitations (Warning)

Indiana applies a 6-year statute of limitations to medical debt. Under IC 34-11-2-9, creditors have 6 years to sue on a written contract for the payment of money (which includes medical bills with signed payment terms). Open accounts and oral agreements are also 6 years under IC 34-11-2-7. The 10-year period in IC 34-11-2-11 applies only to written contracts that are not for the payment of money, so it does not apply to medical debt.

CRITICAL: Making any payment (even $1) on old medical debt can reset the entire 6-year clock. This means a 5-year-old debt that was about to expire becomes fully enforceable for another 6 years.
Collector tactic: Debt collectors may pressure you into making a small "good faith" payment. Do not pay anything on old debt without consulting an attorney first.
Credit reporting: The three nationwide credit bureaus (Equifax, Experian, and TransUnion) voluntarily leave off medical collections under $500 and remove paid medical collections, and they wait a year before reporting medical collections. This is an industry policy, not a federal rule. The CFPB’s 2025 rule to strip all medical debt from credit reports was vacated by a federal court in 2025, so there is no federal ban on medical debt credit reporting as of 2026.

Surprise Billing Protections in Indiana

Federal No Surprises Act (NSA) Coverage

Indiana does not have its own state-level surprise billing law. Indiana patients rely on the federal No Surprises Act (effective January 2022) for protection against unexpected out-of-network charges.

Emergency services: You cannot be balance-billed for emergency care, regardless of whether the facility or providers are in-network
In-network facility, out-of-network provider: If you go to an in-network hospital but are treated by an out-of-network anesthesiologist, radiologist, or other specialist, you pay only in-network rates
Air ambulance: Protected under the NSA. You pay only in-network cost-sharing for air ambulance services
Ground ambulance: NOT covered by the NSA, and Indiana has no state law filling this gap. Verify network status before non-emergency ground ambulance transport when possible.
Good Faith Estimate: Uninsured and self-pay patients must receive a written cost estimate before scheduled services. If the final bill exceeds the estimate by $400 or more, you can dispute it.

Indiana-Specific Gap: Because Indiana lacks a state surprise billing law, patients on state-regulated plans (like some small employer plans and individual market plans) rely entirely on the federal NSA. If you receive a surprise bill, file a complaint with the federal No Surprises Help Desk at 1-800-985-3059 or at cms.gov/nosurprises.

How to Fight a Medical Bill in Indiana (Step by Step)

1
Request an Itemized Bill
Ask for a detailed itemized statement showing every charge, CPT/HCPCS code, service date, and provider. Compare line by line with your Explanation of Benefits (EOB) if insured. Medical billing errors are found in an estimated 80% of hospital bills.
2
Check Hospital Pricing Transparency (SB 225 Defense)
Visit the hospital's website and look for its machine-readable pricing file. If you cannot find it, the hospital may not be compliant with transparency rules. Under SB 225, a non-compliant hospital cannot pursue collection on your debt. Document the absence of pricing data with screenshots and dates.
3
Apply for HIP 2.0 or Financial Assistance
If your income is under 138% FPL, apply for HIP 2.0 immediately (it can cover bills retroactively up to 3 months). If above 138% FPL, apply for the hospital's financial assistance program. Under SB 85, the hospital must offer you a payment plan if you are low or moderate-income.
4
Review for Common Billing Errors
Look for duplicate charges, upcoding (billing for a more expensive service than provided), unbundling (splitting one procedure into multiple charges), charges for services not received, and incorrect diagnosis or procedure codes.
5
Send a Written Dispute (Certified Mail)
Send a certified letter to the hospital billing department identifying specific errors, referencing SB 225 (if applicable), and requesting a billing hold during review. Keep copies of everything. Use our free letter templates to get started.
6
Negotiate or Get Professional Help
If the hospital will not budge, consider negotiating directly (offer a lump-sum payment for 40% to 60% of the balance) or get professional help. Expert medical bill advocates know which levers to pull and often achieve larger reductions than patients can on their own.

Need Help Fighting Your Indiana Medical Bill?

Our advocates handle the negotiation. You only pay if we reduce your bill.

Key Contacts and Resources

Indiana Attorney General - Consumer Protection Division

For: Medical billing disputes, deceptive collection practices, hospital compliance complaints

File a complaint online →

Indiana Family and Social Services Administration (FSSA)

For: HIP 2.0 enrollment, Medicaid questions, benefit eligibility

in.gov/fssa/hip →

Indiana Department of Insurance

For: Insurance claim disputes, surprise billing on state-regulated plans, coverage denials

File a complaint online →

Indiana Legal Services (Free Legal Aid)

For: Free legal help for low-income Hoosiers facing medical debt lawsuits, garnishment, or collections

indianalegalservices.org →

Federal No Surprises Help Desk

For: Surprise bills on self-funded employer plans, good faith estimate disputes

File complaint online →

Pro Tip: When calling, write down the date, time, representative name, reference number, and what was promised. Keep copies of all written correspondence. Send important letters by certified mail with return receipt requested.

Frequently Asked Questions

What does Indiana SB 225 do for patients with medical debt?

SB 225, signed into law in March 2026, prohibits Indiana hospitals from pursuing medical debt collection if the hospital violated state pricing transparency laws. This means if a hospital failed to publish its prices as required, it cannot sue you, send you to collections, or garnish your wages for that debt. This creates a powerful defense for patients and incentivizes hospitals to comply with transparency requirements. A 2024 study found only about 24.5% of hospitals nationwide fully comply with these rules, so this law has broad potential impact in Indiana.

How does Indiana SB 85 protect patients from wage garnishment?

SB 85 (2026) would have eliminated wage garnishment for patients under 200% of the Federal Poverty Level, capped it at 10% above that, required payment plans, and barred primary-residence liens for medical debt. However, SB 85 passed the Senate and then died in the House during the 2026 session, so it is not law. Current Indiana law follows the federal garnishment cap: the lesser of 25% of disposable earnings or the amount over 30 times the minimum wage (IC 24-4.5-5-105).

What is HIP 2.0 (Healthy Indiana Plan) and who qualifies?

HIP 2.0 is Indiana's alternative to traditional Medicaid expansion. It covers adults aged 19 to 64 with income up to 138% of the Federal Poverty Level (about $20,783/year for a single person). Unlike regular Medicaid, HIP 2.0 requires monthly POWER Account contributions ranging from $1 to $27 per month. HIP Plus members who make their contributions get enhanced benefits including vision and dental. HIP Basic is available for those who do not make contributions but covers fewer services. Apply at in.gov/fssa or call 1-877-438-4479. Coverage can be retroactive up to 3 months.

What is the statute of limitations on medical debt in Indiana?

Indiana has a 6-year statute of limitations for medical debt. Written contracts for the payment of money, including medical bills with signed payment terms, fall under IC 34-11-2-9, and open accounts and oral agreements fall under IC 34-11-2-7, both 6 years. The 10-year period in IC 34-11-2-11 applies only to written contracts that are not for the payment of money, so it does not cover medical bills. Making a payment on old debt can restart the clock, so do not make a partial payment on old debt without getting advice first. Never make a partial payment on old debt without consulting an attorney first.

Can Indiana hospitals place a lien on my home for medical debt?

SB 85 (2026) would have prohibited hospitals from placing liens on a primary residence for medical debt, but the bill passed the Senate and then died in the House, so it is not law. Home equity is currently protected by Indiana's homestead exemption of $22,750 per person (IC 34-55-10-2), and Indiana's hospital lien statute (IC 32-33-4) reaches personal injury settlement proceeds (for example, from car accident cases), not your home. Hospitals can still obtain a judgment for medical debt, but the homestead exemption shields your home equity from those judgment liens.

Does Indiana have a surprise billing law?

Indiana does not have its own state-level surprise billing law beyond the federal No Surprises Act (NSA). The federal NSA protects patients from surprise out-of-network bills for emergency services, air ambulance services, and non-emergency services at in-network facilities. However, the federal law does NOT cover ground ambulance services, and Indiana has not passed a state law to fill this gap. For non-emergency ground ambulance transport, verify that your provider is in-network before transport when possible.

How much medical debt does Indiana have?

Indiana has approximately $2.2 billion in medical debt, with roughly 1 in 5 residents carrying medical debt in collections. This is among the higher rates in the United States and was a major driver behind the passage of SB 225 and SB 85 in 2026. The problem is particularly acute in rural areas where fewer hospitals offer robust financial assistance programs and where residents may have longer travel distances to reach in-network providers.

Are Indiana hospitals required to offer payment plans?

There is no general Indiana law requiring hospitals to offer payment plans. SB 85 (2026) would have required them for low and moderate-income patients, but it passed the Senate and then died in the House, so it is not law. However, all nonprofit hospitals must offer financial assistance programs under federal 501(r) rules, and many voluntarily provide interest-free payment plans. It is always worth asking for a structured, affordable payment arrangement before any collection activity begins.

Take Action Now

Get Professional Bill Negotiation

Expert advocates handle everything. You pay only if we reduce your bill.

Find Hospital Financial Assistance Programs

Browse charity care and financial assistance by hospital

Related Resources:

Ascension Financial Assistance•How to Negotiate a Hospital Bill•Medical Bills in Collections Can You Be Sued for Medical Bills?•Free Letter Templates•Ohio Medical Bill Rights•Illinois Medical Bill Rights•Michigan Medical Bill Rights•Bill Defense Service

Disclaimer: This information is for educational purposes only and is not legal advice. Laws and regulations may change. Always verify current requirements with official sources or consult with a qualified attorney for specific legal guidance. CareRoute does not provide legal services.