For decades, Community Catalyst has supported initiatives that reduce the financial exposure people face from medical bills. Coverage expansion has been a key component of our strategy to combat medical debt, but it’s often not enough to protect people who remain uninsured, or are underinsured due to out-of-pocket costs they cannot afford. Over 71 million U.S. adults currently have a debt in collection, and medical debt still leads the pack as the top reason collection agents contact consumers, according to the National Consumer Law Center (NCLC). While the ACA includes protections that aim to curb aggressive billing by nonprofit hospitals, it hasn’t been enough to stem the tide of medical debt – nor to address gaps in state and federal law that fail to protect consumers once the debt has been acquired, transferred to collection agencies, or sold to debt buyers.
That’s why we’re sounding the alarm about a proposed rule from the Consumer Financial Protection Bureau that tips too far in favor of collection agents, allowing them – among other things – to contact consumers up to seven times per week, per debt; send important legal notices by email or text; and resurrect “zombie debts” that have passed the statute of limitations. The rule applies broadly to all types of debt collection, but would have a major impact on health care consumers. If anyone needs help navigating provider billing these days, it’s patients – not collection agents.
National Consumer Law Center
Debt Matters: Equity and Economic Security
Why is debt collection a health care advocate’s issue? First, it’s a social and racial justice issue. A December 2017 study by the Urban Institute showed that medical debt, while widely pervasive, is disproportionately concentrated in the American South, and among non-white communities. (In this study, Urban defined “nonwhite” as African American, Hispanic, Asian or Pacific Islander, American Indian or Alaska Native, another race or multiracial). Veterans and older adults are also hit harder than the general population, making it difficult for families with older heads of households to break cycles of poverty. Some studies have also demonstrated that the debt collection machine, once in motion, operates differently for white and non-white people, in patterns that indicate more aggressive attempts to collect on debt – and fewer “outs” – for people who are not white. Considering the enormous, unethical racial wealth gaps that exist already in the U.S., this is unacceptable.
medical debt restricts how and when people are able to access care. Yet despite all the banter about health systems investing in social determinants of health, there’s been relatively little talk of urging providers to revamp their financial assistance, billing and collection policies to help uninsured and underinsured patients stave off debt. The largest federal initiatives to address these problems to date have arguably been the Affordable Care Act’s requirements that non-profit hospitals inform patients about financial assistance options available and observe reasonable timelines before using aggressive collection tactics; and the ongoing debate over surprise billing. In the wake of major investigations of non-profit hospitals using lawsuits, garnished wages or tax refunds (in the case of one public healthcare system), and other aggressive strategies to collect outstanding medical debt from low- and moderate-income people, one thing’s clear: this isn’t enough to protect people once medical debt has been acquired.
Duty of Care: Three Ways to Take Action on Medical Debt!
The Consumer Financial Protection Bureau is accepting comments through August 19 on their proposed rule. The NCLC has done great work creating useful resources for advocates and grassroots activists, including this summary of the proposed rule with recommendations. We’re encouraging health care advocates to do these three things:
- Inform and engage your networks. Visit NCLC’s Take Action page to find your state data and share widely with people in your community who will be impacted by this proposed rule. (Beyond health care, think about including partners working in community development, housing, predatory lending, aging, social and racial justice, disability and veterans issues.)
- Submit a short comment. Encourage partners and grassroots activists to use NCLC’s Comments Roadmap to submit their comments by the August 19 deadline
- Bone up on current requirements. Take a moment to review what’s required now for non-profit hospitals in your area. Are your hospitals in compliance?