Your mental health and financial well-being may be more closely connected than you realize, and lawmakers in Tennessee are taking a closer look at that connection.
During the first half of the legislative session, the 114th Tennessee General Assembly discussed proposed changes in law that link finances and health. These changes could impact not only your mental health but also your financial stability. Senate Bill 0402, introduced by Sen. London Lamar of Shelby County, was assigned to the Senate Commerce and Labor Committee this past March and may be discussed further when legislators reconvene four months from now.
The companion measure, House Bill 0539, sponsored by Rep. Vincent Dixie of Nashville, would prohibit healthcare providers from reporting a patient’s medical debt to a consumer reporting agency while also barring consumer reporting agencies from including medical debt in a consumer report. Because numerous studies show a strong and consistent link between financial stress and mental health, this legislation could provide meaningful benefits to many Tennesseans.
If passed, the bill could bring relief to many, easing harmful financial stress and, in turn, supporting better overall health. Research shows higher rates of anxiety, depression, and psychological distress among those under financial strain. A 2022 study in the U.S. National Library of Medicine found that financial worries and psychological distress were even stronger for unmarried, unemployed, low-income individuals, and renters compared to homeowners. The study further confirmed growing evidence that financial strain plays a significant role in mental health.
If enacted into law, any healthcare provider that disregards the regulation and continues reporting medical debt to consumer reporting agencies would be committing an unfair and deceptive act under the Tennessee Consumer Protection Act (TCPA). Penalties could include up to six months in jail, a fine of up to $500, or both. Such a violation would constitute a Class B misdemeanor offense.
However, the bill leaves some gray areas unresolved. One concern involves medical debt sold by healthcare companies to collection agencies. The bill summary states, “This bill prohibits a healthcare provider from reporting a patient’s medical debt to a consumer reporting agency, but does not prohibit a healthcare provider from reporting such debt to a debt collections agency.” As written, the bill does not clarify whether a collection agency can place negative marks on a consumer’s credit report when collecting medical debt acquired through purchase rather than directly owed.
Studies from around the world consistently highlight the tie between financial strain and mental health. For example, a Canadian study of more than 8,000 adults found debt stress significantly linked to psychological distress. In the United Kingdom, those in serious debt were 4.2 times more likely to remain depressed 18 months later and three times more likely to have suicidal thoughts, according to the Money and Mental Health Policy Institute.
In April 2024, TIME magazine also reported on the close connection between chronic financial stress and health, noting that such stress not only affects mental health but can also lead to physical problems like high blood pressure, headaches, insomnia, and a weakened immune system.
The 114th General Assembly in Tennessee will reconvene on January 13, 2026, when legislators will continue the second half of their session.
