Thousands of Vermonters could see their medical debt wiped away under a bill headed to the governor’s desk.

The legislation, S. 27, would use $1 million in funds appropriated to the Treasurer’s Office to erase $100 million in Vermonters’ medical debt. It would also prohibit credit reporting agencies from taking into account Vermonters’ medical debt when determining their credit scores.

“With medical debt, it often happens to you when you have no control,” Vermont Treasurer Mike Pieciak, who has spearheaded the proposal, told lawmakers this month. “You don’t have the ability to say, ‘I’m going to delay this care or delay this treatment.’ You don’t have the ability to shop around. You’re being taken by ambulance to a hospital and the procedure’s happening to you.”

The bill leverages the fact that medical debt can be purchased for pennies on the dollar — roughly one penny per dollar of debt, in fact. Thus, a $1 million investment could erase about $100 million of debt.

Pieciak estimated that the legislation could eliminate medical debt for about 60,000 Vermonters.

The $1 million investment would come out of $20 million in general funds appropriated to the Treasurer’s Office to pay off bonds before their maturation date. According to the Joint Fiscal Office, if that $1 million was used for its initial purpose, the state could have saved about $50,000 in interest.

The legislation has received unanimous support from both chambers of Vermont’s General Assembly. The bill passed the Senate last month, and House lawmakers voted it out Tuesday.

The bill, now poised to become law, would place Vermont among roughly 20 states and cities that have used public funds to eliminate residents’ medical debts.

To wipe away Vermonters’ health care debts, the bill directs the state to partner with a nonprofit, Undue Medical Debt, which would work with health care providers to purchase the debt.

It’s not clear whether all hospitals or health care providers would sign up to participate. But Devon Green, a lobbyist for the Vermont Association of Hospitals and Health Systems, said earlier this year that her organization supports the bill “wholeheartedly.”

Vermont’s program would prioritize people whose debts are older than 18 months old. The debts must be considered uncollectible by health care providers, and the individuals must fulfill one of the following criteria: Either their debt must be 5% of a household’s annual income, or the individuals or households have income at or below 400% of the federal poverty level — currently, $60,240 for a single person or $124,800 for a family of four.

Residents would not need to apply to have their debt canceled and would be enrolled automatically and notified if their debt is erased.

Mike Fisher, Vermont’s chief health care advocate, told lawmakers this month that the bill was an important step forward in helping Vermonters find relief from health care debt.