[Senate Hearing 117-759]
[From the U.S. Government Publishing Office]
S. Hrg. 117-759
ECONOMIC IMPACT OF THE GROWING BURDEN
OF MEDICAL DEBT
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HEARING
BEFORE THE
COMMITTEE ON
BANKING,HOUSING,AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
ON
EXAMINING HOW WE CAN PROTECT AMERICANS FROM THE GROWING BURDEN OF
MEDICAL DEBT AND DEBT COLLECTOR HARASSMENT
__________
MARCH 29, 2022
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Printed for the use of the Committee on Banking, Housing, and Urban
Affairs
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available at: https: //www.govinfo.gov /
__________
U.S. GOVERNMENT PUBLISHING OFFICE
53-817 PDF WASHINGTON : 2024
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COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
SHERROD BROWN, Ohio, Chairman
JACK REED, Rhode Island PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey RICHARD C. SHELBY, Alabama
JON TESTER, Montana MIKE CRAPO, Idaho
MARK R. WARNER, Virginia TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia JERRY MORAN, Kansas
RAPHAEL G. WARNOCK, Georgia KEVIN CRAMER, North Dakota
STEVE DAINES, Montana
Laura Swanson, Staff Director
Brad Grantz, Republican Staff Director
Elisha Tuku, Chief Counsel
Dan Sullivan, Republican Chief Counsel
Cameron Ricker, Chief Clerk
Shelvin Simmons, IT Director
Pat Lally, Hearing Clerk
(ii)
C O N T E N T S
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TUESDAY, MARCH 29, 2022
Page
Opening statement of Chairman Brown.............................. 1
Prepared statement....................................... 27
Opening statements, comments, or prepared statements of:
Senator Toomey............................................... 3
Prepared statement....................................... 28
WITNESSES
Robyn M. King, of Ohio........................................... 6
Prepared statement........................................... 29
Emily Stewart, Executive Director, Community Catalyst............ 7
Prepared statement........................................... 31
Benedic N. Ippolito, Senior Fellow, American Enterprise Institute 9
Prepared statement........................................... 36
David A. Hyman, Scott K. Ginsburg Professor of Health Law &
Policy, Georgetown University Law Center....................... 11
Prepared statement........................................... 47
Berneta L. Haynes, Staff Attorney, National Consumer Law Center.. 12
Prepared statement........................................... 49
Responses to written questions of:
Senator Menendez......................................... 93
Additional Material Supplied for the Record
Statement submitted by Mindy Hedges.............................. 100
Statement submitted by Penelope Wingard.......................... 107
Statement submitted by Sloane Wesloh............................. 109
(iii)
ECONOMIC IMPACT OF THE GROWING BURDEN OF MEDICAL DEBT
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TUESDAY, MARCH 29, 2022
U.S. Senate,
Committee on Banking, Housing, and Urban Affairs,
Washington, DC.
The Committee met at 10 a.m., via Webex and in room 538,
Dirksen Senate Office Building, Hon. Sherrod Brown, Chairman of
the Committee, presiding.
OPENING STATEMENT OF CHAIRMAN SHERROD BROWN
Chairman Brown. The Senate Committee on Banking, Housing,
and Urban Affairs will come to order. Today's hearing is a
hybrid format. Our witnesses will testify in person. Thanks to
all five of you for making the effort to be here. Some of you
came as far as from Cleveland, so thank you for that. The
Members will participate, some in person, some virtually.
Think about watching a loved one rushed to the hospital in
an ambulance, or learning you have a chronic disease that is
going to require years of care and monitoring. These kinds of
medical ordeals are some of the scariest moments in a family's
life.
They can happen at any time, to anyone, without warning.
Suddenly you are coordinating doctor's visits and calls with
insurance companies. You are nervously checking your savings
account. You are spending hours on interminable phone calls
trying to get answers. And you are dealing with it all while
worrying whether your husband or your mother or your child will
make it out of the hospital, or whether their health problems
will continue.
As the cost of prescription drugs rise, hospital bills
skyrocket, and debt collectors start calling, families are
forced to figure out how to make ends meet, instead of focusing
on their health.
Families all over the country are telling us that.
We heard from Penelope Wingard, an after-school teacher
from North Carolina, who lost her health coverage while
battling breast cancer. When her medical bills began to pile
up, her doctors eventually stopped seeing her. Soon after, Ms.
Wingard had an aneurysm, in addition to vision loss, both of
which required surgery. Because of the financial situation
caused by her cancer diagnosis, Ms. Wingard was forced to wait
and then seek care from a limited list of providers who were
allowing sliding scale payments.
Debt collectors call her--they harass her--every single
day. And now her credit is ruined because of her health.
Right now, Ms. Wingard needs additional testing to ensure
her cancer has not returned, which has added an additional
$2,000 to her debt. So instead of focusing on battling her
illness, she has to figure out how to handle the debt
collectors.
And Ms. Wingard is far from alone. In the United States, 43
million Americans hold $88 billion dollars of medical debt on
their credit reports, and this problem is growing. It can
happen to anyone. Low-income families, Black and Hispanic
households, veterans, young adults, and older Americans are hit
particularly hard.
And debt collectors make this already exhausting experience
worse. They call over and over, they make threats, and they
even contact patients' employers.
Take, for example, Mindy Hedges, from Delaware County,
Ohio. She has had type 1 diabetes since she was five. For most
of her adult life, until the passage of the Affordable Care
Act, she was unable to get health insurance because she had a
preexisting condition.
After losing her business in the 2008 recession, her
medical bills piled up, and she was unable to repay them. That
is when the debt collectors started calling. And calling. And
calling. And calling.
Ms. Hedges did her best. She tried to negotiate. She even
begged for relief. But the harassment continued. At one point,
she was even afraid to leave her house.
This harassment is part of the business model.
A counselor at a medical debt collection agency owned by a
private equity firm had some choice words about harassing
patients. They said they found the first 20 to 30 calls to be,
quote, ``highly effective.''
If the calls do not work debt collectors often move on to
even more aggressive tactics like litigation, forcing people to
go through lengthy, expensive, and emotionally draining court
proceedings, often while still battling cancer or grieving a
loved one.
For patients, litigation can result in garnished wages or
property liens. We even see people thrown in jail because they
could not afford to pay. It is the return of debtor's prison.
People in the United States of America today are in jail, right
now, because of medical debt.
And of course, whenever we find suffering, Wall Street
finds opportunity. Private equity firms are making inroads in
the medical debt collection market. Between 2015 and 2016, one-
third of all debt collection agency acquisitions were bought by
private equity. Those firms exist purely to maximize investor
profit, no matter the cost to society.
Maybe that is why private equity-owned debt collection
agencies are responsible for an outsized number of consumer
complaints, many concerning attempts to collect debt from
people who do not owe them.
We must address the growing crisis of medical debt
burdening American families.
President Biden and his Administration are working to
remove barriers to medical debt forgiveness for veterans, and
to make it easier and cheaper for them to get care. No one who
served this country should be saddled with debt for illness or
injuries incurred in the line of duty.
And the Biden administration has wasted no time in
implementing the No Surprises Act, which took effect on January
1st. This bipartisan law finally bans surprise medical bills.
One way to prevent debt collector harassment is to protect
people from debt in the first place.
The CFPB is also doing important work exposing the abuses
Americans face while just trying to get health care. And after
increasing scrutiny and pressure, the three credit reporting
bureaus--Equifax, Experian, and TransUnion--all announced they
would significantly change how medical collection debt is
reported. These changes are expected to remove nearly 70
percent of medical debt in collections from credit reports.
This is a positive first step, but just a step.
And this first step gets to a basic step that we too often
ignore: medical debt does not correlate with credit risk. It
correlates with illness.
It should be obvious--anyone can get sick. Anyone can get
in a car accident. It has nothing to do with your ability to
pay your bills--or at least it should not. No one should be
forced into poverty, no one should be harassed by shady debt
collectors because of a medical emergency or a sick family
member.
We have taken important steps to protect Americans, but we
can do more.
I am asking the CFPB to create an ombudsman position for
consumer medical debt.
It is also why expanding Medicaid coverage to those who
live in the 12 States that have refused to expand Medicaid
under the Affordable Care Act is long overdue. I am
appreciative of two Members of this Committee, Senator Warnock
and Senator Ossoff, who are working to finally get this done,
either here or in their State.
Of course, meeting these challenges cannot be done by the
Government alone. Private industry must act. This country needs
private institutions to meet their obligations of financial
assistance and the No Surprises Act.
Today we are hearing from two advocates for consumers as
well as one of my constituents, Robyn King, from Cleveland. Ms.
King will tell her story of battling medical debt she never
owed, after a nursing home cared for her mother.
I look forward to hearing more about how we can protect
Americans from medical debt and debt collector harassment. No
one should have their financial future ruined simply because
they get sick.
Senator Toomey.
OPENING STATEMENT OF SENATOR PATRICK J. TOOMEY
Senator Toomey. Thank you, Mr. Chairman.
Pricing risk accurately is critical to the safety and
soundness of financial institutions, and to consumers' ability
to access affordable credit, because when borrowers default,
lenders have to absorb the costs. That is why lenders generally
look at information about credit history. It helps them
estimate the risk of default and to price loans.
Lenders who cannot access information that they consider
predictive of risk are likely to restrict their lending to the
borrowers with the thickest credit files, seek out relevant
proxies for the credit information they are not able to obtain,
or increase the price of loans to all borrowers in order to
capture the uncertainty and the risk. This hurts all consumers,
including low-income families and those without a long credit
history. For all of those reasons, the Government should not
suppress the reporting of accurate credit information.
Unfortunately, so-called consumer groups and allies have
sought to remove information from credit reports and thereby
make them less accurate. I am afraid such actions will have
adverse unintended consequences.
Today's hearing title is the ``Growing Burden of Medical
Debt''. It is an interesting but inaccurate title, because
evidence suggests medical debt is actually falling, not
growing.
According to the CFPB's own estimate, which the Chairman
cited, medical debt in collections last year was $88 billion.
That is a nominal reduction of 10 percent over the last 3.5
years.
Another study showed that average medical debt in
collection fell by 40 percent in the last decade. And that is
despite the fact that over the same period medical spending
increased 70 percent--and over 50 percent per capita. This is
all illustrated on Chart 1 behind me.
Now there are likely many reasons for a decline in medical
debt. A primary driver was the improving economy. After the tax
reform in 2017, those with the lowest wages--those most likely
to have medical debt--were making the biggest gains in income.
Another driver of the decline was the enactment of
Obamacare and Medicaid expansion. Researchers estimate that for
every $25 spent on Medicaid expansion, medical debt in
collections decreased $1.
There are many aspects that have made me question the
wisdom and efficacy of Medicaid expansion, including its cost
and the lack of evidence that it improved health outcomes. But,
unsurprisingly, if you are willing to spend massive amounts of
other people's money, you can transfer individuals' debts onto
the taxpayers. That is illustrated in Chart 2.
So all available evidence suggests there is no ``growing''
burden of medical debt. In fact, the scale of medical debt is
often misunderstood. As illustrated in Chart 3, medical debt in
collections represents less than 1 percent of all household
debt. Two-thirds of medical debt collections are under $500,
and bankruptcy from medical debt is extremely rare, as
illustrated in Chart 4--3/100ths of 1 percent of the population
suffers bankruptcy each year as a result of a hospitalization.
And medical debt is not strictly an American phenomenon.
Every health care system in the developed world includes out-
of-pocket payments. According to the World Health Organization,
even before Medicaid expansion, the likelihood that out-of-
pocket expenses would exceed a quarter of one's income was
roughly as rare in the United States, 0.8 percent, as Canada or
the Ukraine, about 0.5 percent, and considerably rarer than in
Italy, Spain, Korea, Switzerland, and other countries in the
developed world.
Recently, credit reporting agencies announced changes that
will reduce the amount of medical debt that appears on consumer
credit reports going forward. Now, if a credit reporting agency
decides to exclude this information, I do not think it is the
Government's role to meddle with such a decision. However, if
credit reporting agencies had collectively decided the
opposite--if every one of them had gotten together and decided
they would begin at the same time to add consumers' medical
debt information onto reports--I suspect the howls and protests
about greed and collusion would have been deafening.
What appears to have occurred here was that a political
campaign, which included the CFPB, bullied lenders and credit
rating agencies into removing this information. This kind of
misuse of power by the administrative state has grown all too
common. It is an example of how Congress has become far too
comfortable with the Executive branch seizing the Article I
lawmaking authority of Congress.
We need to be careful that any actions considered to
address symptoms--in this case debt from a health condition--do
not make matters worse. This new credit reporting agency policy
does not actually lower the cost of medical care. In fact, it
will either raise costs or reduce access.
It may end up discouraging people from paying medical
bills. That could lead to health care providers finding ways
not to treat individuals without an obvious means to pay. And
by eliminating one metric in a credit rating, it may cause
credit rating agencies to use other metrics, or proxies, that
are less accurate, which could actually hurt low-income
populations more.
These kinds of downstream effects would not be shocking
given that the entire effort to micromanage credit ratings is
coming from an agency that has no expertise on complex medical
billing and health care systems.
It should remind us that intervention into the market, no
matter how noble advocates may think they are being, will have
consequences, usually unintended consequences. And second,
interventions should come after careful deliberation by the
people's representatives, not diktats from unelected
bureaucrats.
Thank you, Mr. Chairman.
Chairman Brown. Thank you, Senator Toomey.
I will introduce today's five witnesses. Robyn King, a
former second-grade teacher's assistant in Cleveland, now works
part-time and volunteers when she is not caring for her family.
Ms. King uses her voice to shed light on the terrible toll that
medical debt is taking on average Americans.
Emily Stewart is the Executive Director of Community
Catalyst, overseeing the direction of its advocacy of consumer
health care rights and the organization's finances and
operations. She has two decades of experience in health care
advocacy.
Dr. Benedic Ippolito studies health care financing and the
pharmaceutical market and its regulations and the effect of
health care costs on the personal finances of Americans. He is
a Senior Fellow in Economic Policy Studies at the American
Enterprise Institute.
David Hyman is the Scott Ginsburg Professor of Health Law &
Policy at Georgetown and is an adjunct scholar at the Cato
Institute, a doctor as well as a lawyer. He served most
recently as the Ross and Helen Workman Chair in Law and
Professor of Medicine at the University of Illinois.
Berneta Haynes is a staff attorney at the National Consumer
Law Center, working on a portfolio that includes consumer
medical debt policy and energy policy. She recently published a
report examining the intersection between the racial health gap
and the racial wealth gap and harm of aggressive medical debt
collection.
Thank you all for giving us your time and joining us today.
I will begin with Ms. King. Welcome.
STATEMENT OF ROBYN M. KING, OF OHIO
Ms. King. Good morning. It is an honor to be here today,
and it is a privilege to be able to share my story with this
Committee.
I am here to speak about my experience with medical debt.
It is something that affects thousands and thousands of people
in this country every year, and I know firsthand that the
consequences of these burdens can be debilitating. I was lucky
enough to get help from the attorneys at Legal Aid in
Cleveland, but many people are not so lucky. For them and for
others who have yet to be victimized, I share my story.
I am a mother with three children. I worked as a teacher's
assistant for 10 years, and recently transitioned to working
part-time at a Learning Center. I still volunteer with children
and older adults in my spare time. I also am the youngest of
six siblings who all cared deeply about our mom.
If you have ever brought a parent or loved one to a nursing
home, knowing they will live out their final days there,
knowing you are trusting all of their care and comfort to
strangers, that is a day you will never forget. Because Mom was
suffering from Alzheimer's and had difficulty understanding
what was happening, my siblings and I decided I would be Mom's
representative for the nursing home admission and sign all of
the paperwork that allowed my mom to be admitted into the
facility.
My mom's Social Security checks were used to pay for her
portion of the nursing home bill, and Medicaid covered the
rest. Knowing that my finances were already tight, I made sure
to check the box on the nursing home admission form which said
I did not agree to be personally liable if finances for my
mom's medical care ran out. I have a household of my own to
take care of and knew that I could not afford to pay any
nursing home for my mom's medical expenses.
In November 2019, nursing home staff told me Mom's Medicaid
needed to be reinstated, so I went to the office and filled out
some more forms. I did not hear anything from them about
Medicaid for months, so I assumed everything had been taken
care of.
I was shocked when the nursing home told me, in May 2020
that Mom's Medicaid actually had not been reapproved and that I
was now responsible for paying a huge bill. Why had they not
told me this months ago? How could they have kept this
information from me, when I always did everything the nursing
home asked me to do? Maybe we could have figured out a way to
prevent them from coming after me for this debt.
Because the nursing home took so long to tell me that
Medicaid had stopped paying Mom's bills, the amount owed had
grown huge. They were now trying to collect almost $70,000. And
while I tried frantically to fix the situation, the nursing
home started sending bills each month, every bill larger than
the last.
My mom passed away on October 3, 2020. Just 2 days earlier
I had received notice that I was being sued by the nursing home
for close to $80,000.
I never had time to grieve. I kept so much inside; the
stress was unbearable. I thought, I will not be able to afford
my mortgage, and I am definitely going to lose my house. I
could face a garnishment of my paycheck and be forced to live
on a reduced income when money was already tight to begin with.
What will I tell my kids? What does it mean, to have this kind
of judgment against you? How will that impact the rest of my
life? At one point I even thought, I would rather be with my
mom. I felt defeated. I had nothing to give.
The lawsuit made no sense to me since I told the nursing
home that I would not be personally responsible for any of my
mom's medical expenses. On my sister's advice, we called
Cleveland Legal Aid. I am so grateful for my attorneys' help
because they freed me from having to pay the nursing home debt
with my own money.
The nursing home is still pursuing my mom's estate for what
is owed, so it is still impacting my life. While I am not
personally on the hook for the debt, they are still going after
my family's assets.
I hope you can take action to protect people like me and
not allow medical debt to upend people's lives. Medical care is
not something we can opt out of. Getting sick or having a
family member get sick should not force people to face crushing
amounts of debt. I thought that I had done everything right in
taking care of my mom, but without Cleveland Legal Aid I would
have had an enormous judgment against me, and my family's
financial future would have been devastated. There must be a
better way to take care of each other and not leave people like
me facing life-changing amounts of debt. There is just no
excuse for this in America.
I hope that my testimony today will help turn my story into
something positive. Thank you.
Chairman Brown. Thank you, Ms. King.
Ms. Stewart of Community Catalyst, welcome.
STATEMENT OF EMILY STEWART, EXECUTIVE DIRECTOR, COMMUNITY
CATALYST
Ms. Stewart. Thank you. Good morning, Chairman Brown and
Ranking Member Toomey and Members of the Committee. Thank you
for having me.
Community Catalyst is a national nonprofit organization
that is dedicated to building the power of people to build a
health system that is rooted in race equity and health justice
in a society where health is a right for all. For nearly 25
years we have worked at the forefront of local, State, and
national conversations to make the health system more
responsive to people, and over the course of that time one of
the major takeaways from our work has been the deep connection,
and troublesome connection, between people's health and their
overall financial well-being.
There is no issue that shines a brighter light on this
reality than the issue of medical debt. It is important to put
medical debt into its context. Our health system is costly, it
is imbued with inequity, and this harms us all. Billing and
collection is complicated and confusing, even to experts, but
its patients, individual people who are put in the position of
resolving that complexity, whether it be figuring out whether
or not they were owed, they owed the bill to begin with, or
navigating a dispute between their health plan and their health
care provider.
There are many sources of medical debt, with the largest
share from ER visits, dental care, and diagnostic tests, such
as x rays and MRIs. It is such a concerning issue that 40
percent of Americans say that they are more fearful of medical
debt than a serious illness. The Census Bureau estimates that
17 percent of U.S. households hold medical debt. There are
other studies that have higher estimates, and it is entirely
plausible that most people know someone who has been impacted.
In preparation for this hearing I decided to survey my
siblings. I have seven of them. Five of us have had medical
debt, in the thousands, ranging from ER visits, pregnancy-
related care, and surprise bills.
Of course, medical debt impacts some more than others.
People who are uninsured are more likely to have medical debt,
and importantly, many of them are living in States that have
not expanded Medicaid under the Affordable Care Act. And due to
discriminatory barriers to affordable coverage and care, there
is a disproportionate effect on people of color, with 27
percent of Black households and just under 19 percent of Latinx
households reporting medical debt.
Families with children are far more likely to have medical
debt than those without, and families with a member who has a
disability are nearly twice as likely to have medical debt.
Medical debt can have a profound impact on people's health
and well-being. Thirty-seven percent of people with medical
debt have used up all their savings to pay off their bills, 31
percent took on new credit card debt, and 11 percent took out a
mortgage against their income or another type of loan. People
report reduced spending on food, clothing, and other household
items.
It should come as no surprise that people with medical debt
are much more likely to report experiencing stress, anxiety,
and depression, and the COVID-19 pandemic has exacerbated the
issue for many. For example, through our work with coalition
partners in Illinois, a story surfaced of a man with work
authorization in the State. He was rushed to the emergency room
with COVID-19 complications and subsequently charged $11,798.
The hospital denied him any financial assistance, even though
he was eligible under State law, and even though Federal
assistance was already in place for COVID-19-related care. He
paid over $1,000 each month for a number of months because he
was afraid that his bill would impact his immigration status or
his ability to buy a home.
Whether a person's medical bill problem is alleviated or
aggravated hinges on who holds the debt. Many hospitals offer
extended payment plans directly to their patients, and, in
fact, nonprofit hospitals are required to offer financial
assistance under Federal community benefit standards. However,
many people are unaware of these programs and not adequately
informed of them upon receiving their first bill.
For many people the headache begins when the bills are sent
to third-party collection agencies. These agencies are paid a
percentage of the debt they collect, they typically report the
accounts to the credit bureaus, and if not paid promptly they
pursue legal action. Numerous press reports have detailed
people having their wages garnished, bank accounts frozen, or
liens put on their homes.
Medical debt can ruin people's credit rating, and to make
matter worse, the data is often inaccurate or out of date. An
analysis by CFPB showed that nearly two-thirds of collection
complaints assert that the debt was never owed, never verified
as the consumer's debt, already paid, or discharged in
bankruptcy.
Proposals to address this issue are necessarily
multifaceted, but there are a few to highlight. Senator Brown,
Community Catalyst supports your proposal for a CFPB ombudsman
to resolve medical debt complaints. It is important to also
eliminate unpaid medical billing data on credit reports and to
hold credit reporting agencies accountable for accurate data.
It is important also to strengthen nonprofit community benefit
standards, prohibit wage garnishments and liens on property,
and to apply those protections to for-profit hospitals. Also,
extending Medicaid coverage to people who are living in States
that have yet to expand Medicaid.
Thank you for hearing this testimony, and I look forward to
your questions.
Chairman Brown. Thank you, Ms. Stewart. Dr. Ippolito.
STATEMENT OF BENEDIC N. IPPOLITO, SENIOR FELLOW, AMERICAN
ENTERPRISE INSTITUTE
Mr. Ippolito. Thank you very much for having me. I am going
to echo some of the comments that we just heard.
Medical debt is different than other forms of consumer
debt. A lot of consumers are not actively pursuing this debt.
They are not taking on debt intentionally. More than that, I
think it reflects these features of the health care system that
attract justifiable criticism. It is very expensive. Billing is
quite complex. And so certainly the extra attention that we pay
to medical debt is certainly understandable.
That said, as policymakers consider the issue it is
important to be able to begin with a firm grasp of the
empirical reality surrounding medical debt in the United
States.
I think many of us think of medical debts a reflecting tail
events, those kinds of unexpected, catastrophic health shocks
that can give rise to very large bills. And while those debts
absolutely do exist, they do not, when you look at the data,
appear to be representative of the typical experience in the
United States.
Instead, medical debt is a very common phenomenon that
seems to reflect actually much more typical common interactions
with the health care system. So for example, about 16 or 17
percent of adult Americans have medical collections on their
credit reports. The average medical collection itself is about
$300. I think for a lot of people that is relatively modest,
and I do not mean modest in the sense that that is unimportant,
but modest in the sense of the kind of bills that we know can
happen in the health care system, certainly that we heard about
today.
In aggregate, consumers owe about $100 billion in medical
collections alone. That number is a little higher if we include
other forms of medical debt. About 92 percent of those medical
collections, however, are never reported as paid on credit
reports.
These debts can affect household finances in a few ways.
Perhaps most centrally they can lower credit scores. That
obviously makes it harder or more expensive for consumers to
borrow. Many have called that practice into question, so it is
worth considering what policy changes are warranted and what
tradeoffs we might need to consider.
Obviously, credit scores are meant to summarize credit
worthiness, so if they are not doing that accurately, if they
are penalizing consumers for things they cannot control or
otherwise are not predictive of their credit worthiness, those
are the kinds of things we ought to address. And I think some
medical debts clearly fit in that category. So for example, a
medical debt that is initially incurred because of confusion
over a billing process but is later repaid surely carries less
predictive risk about future credit risk than a bill that is
willingly incurred and then goes unpaid for a long time. So
policies that, for example, would distinguish between things
like paid versus unpaid medical collections certainly would
help consumers who are inappropriately penalized in the current
market.
Some obviously argue in favor of policies that go further
and disallow the reporting of otherwise accurate medical
collections. Indeed, the major credit bureaus have announced a
policy that would do that for the majority of medical
collections recently.
Those kinds of policies come with more potential unintended
consequences that I do think are at least important to flag for
policymakers who are interested in this area and are interested
in these policies actually achieving their stated goals.
So in particular, while medical collections are certainly
less predictive of some future repayment risk, that does not
mean they are not predictive. So we have to think about, from
the perspective of a lender there is a risk that they place
some value on that is now not eliminated. It is obscured. So
how are they going to respond to the fact that they cannot
observe this anymore?
So I think there are a couple of potential ways. First, you
might try and reweight. You might try and put more emphasis on
other kinds of things that appear on credit records that are
not medical collections but you think are indicative of a
similar risk, other kinds of collections, other kinds of
delinquencies, for example. It is not ex ante obvious that the
distributional consequences of that kind of reaction are better
than the status quo.
If they do not think they can find a clear proxy they may
instead just increase the cost of borrowing across all
consumers or, in some cases, you may change your lending
habits, particularly in populations where you think there is a
high unobserved risk and where it is harder to proxy. So for
example, young consumers carry a lot of medical debt in the
United States. They also tend to have thinner credit files.
That is the kind of population where you may be more concerned
about that kind of adverse reaction.
Finally, these tradeoffs, I think, sound a little bit
academic or theoretically but they certainly are reminiscent of
very real-world issues that we see, certainly in the health
care market, where we try and achieve similar things through
regulatory redistribution. So for example, health insurance
premiums cannot vary with health status or expected health
expenditures. That obviously is motivated by equity concerns,
and it has a similar flavor to what we are talking about today.
We are trying to help people who have this unexpected health
shock that they cannot necessarily prevent.
That said, it distorts pricing signals in the market and it
creates a lot of instability. We constantly have to be vigilant
over risk-pooling issues in these markets. We constantly have
to be vigilant about unraveling incentives that distort the
actual stability of the fundamental market itself. If the
market is not stable, if we do not have insurance products that
are readily available to consumers, that really attenuates the
benefit of a lot of these policies.
And so that is not to say this is not an important topic
and it is not worth addressing. It is to say, however, that
there are important potential unintended consequences that we
should be aware of and we certainly should emphasize.
I thank you for having me, and I look forward to the
questions.
Chairman Brown. Thank you, Dr. Ippolito. Professor Hyman.
STATEMENT OF DAVID A. HYMAN, SCOTT K. GINSBURG PROFESSOR OF
HEALTH LAW & POLICY, GEORGETOWN UNIVERSITY LAW CENTER
Mr. Hyman. Chairman Brown, Ranking Member Toomey, and other
Members of the Committee, thank you for inviting me to speak to
you. I am a professor at Georgetown where, among other classes,
I teach consumer protection and a course entitled ``How to
Regulate'', so this is very much something I think about a lot.
I am primarily a health law and policy person. I have also
been the victim of identity theft and had to deal with medical
bills for myself and my kids, so I think the difficulty of
going fourth when we have got such a distinguished lineup of
speakers is to say, ``well, a lot of what I wanted to say has
been said already'' so I will focus on a couple of issues that
have not been flagged yet.
The first is you hear numbers thrown around, and those
numbers vary widely. We have already heard figures ranging from
$89 billion to $195 billion in medical debt. When you see a
range that wide you should conclude that there is some
uncertainty as well as variation in the way in which people are
measuring things, and that is exactly what is going on here.
Methodological choices and definitional uncertainty matter.
So the most common approach to quantifying the problem of
unpaid medical debt involves looking at credit reports, and
those credit reports flag certain things as coming from medical
providers that are in collections. Now that is series of
limitations that you ought to at least be aware of, because
most of these studies involve data from a single credit
reporting agency and the same information is not necessarily
reported to all of the agencies.
Second, the accounts that are in collections are
necessarily a subset of all accounts, particularly given the
time lag in reporting. But the additional problem that is often
not appreciated is the designation of medical debt obscures the
reality that patients often use a variety of strategies to pay
for their health care bills, including using traditional credit
cards, using medical credit cards, taking out home equity
loans. And if those go into collections, even though they are
attributable to an underlying medical cost, they will not be
flagged as medical debt.
And the alternative approach uses surveys, including data
gathered by the census, that has some advantages and some
disadvantages, I am happy to talk about in the Q&A. But the
short version is the numbers that you hear reflect a very
specific set of assumptions about what does and does not count
as medical debt.
The second point I want to make is that medical debt is a
function or a result of multiple interactive factors. You can
start with whether somebody receives health care or not,
second, how much they are billed for it, third, how much is
paid for or discounted off of that list price from various
sources, and that includes insurance, it includes self-payment,
it includes charity care policies. And all of those are moving
parts that affect whether any given individual, with any given
set of circumstances, has medical debt, and if so how much.
The third point I want to make is that modifications to
credit reporting of medical debt may provide some relief, but
as Dr. Ippolito already said, you should be wary of some of the
unintended consequences. It is a solution to a symptom. It is
not a solution to the underlying problem.
And that is the last point I want to end with and
emphasize, which is the reason why we have medical debt is
because health care in the United States is expensive. And if
you want to address the problem of medical debt you should
treat the underlying cause, i.e., the disease, rather than the
symptom, and focus on ways of making health care less
expensive.
I flagged two possible strategies but there are many
others, one of which is pushing hospitals to more fully
implement their charity care obligations, specifically
nonprofit hospitals which have long had an obligation to do
that under both State and now Federal law. I think to the
extent hospitals are a major source of these bills that result
in medical debt, that is going to be an important tool that
already exists.
Second, I want to acknowledge that Congress has already
taken an important step in addressing some aspects of medical
debt with the No Surprises Act that both Dr. Ippolito and I
helped consult on in the context of that legislation. And there
are additional strategies as well.
But it is important to keep your eye on the ball. The ball
here is high health care costs that result in these problems,
and those problems are disproportionately borne by certain
portions of the population.
Thank you very much for your attention.
Chairman Brown. Thank you, Professor Hyman. Ms. Haynes,
welcome.
STATEMENT OF BERNETA L. HAYNES, STAFF ATTORNEY, NATIONAL
CONSUMER LAW CENTER
Ms. Haynes. Thank you. Chairman Brown, Senator Toomey,
Members of the Committee, I appreciate the opportunity to
testify on the economic impact of medical debt.
I provide my testimony today on behalf of the low-income
clients of the National Consumer Law Center. We believe medical
debt poses a severe problem disproportionately impacting Black
and Latinx families. We ask that you provide consumer
protections to prevent medical debt at the outset, and to
shield consumers from harmful debt collection practices and
long-term impacts on their well-being.
According to the CFPB, medical debt represents more than
half of all debts in collection and remains a leading cause of
bankruptcy. I live in Georgia, where I have worked directly
with consumers and seen up close the real-life impacts of the
medical debt crisis. Nineteen percent of Georgians have medical
debt in collections, 17 percent of White Georgians and 21
percent of non-White Georgians.
Likewise, 17 percent of Ohioans have medical debt in
collection, 17 percent of White Ohioans, 23 percent of non-
White Ohioans. Similar disparities exist across the country.
Consumers with medical debt face aggressive debt
collection. To avoid debt collection, families drain their
savings, increase their credit card debt. They turn to
deceptive financial products like medical credit cards and
high-interest loans to pay off medical bills. Because medical
debt often appears as other forms of debt in individual credit
history, it likely has an even larger impact than data
currently shows.
Aggressive debt collection takes so many forms. Hospitals
sometimes turn bills over to third-party debt collectors who
may use frequent, abusive, and harassing communication to
pressure consumers to pay. Medical debt is consistently the
most common type of debt about which people are contacted by
debt collectors. Debt collectors contact Black households at
twice the rate of White households, according to the FTC.
In some cases, health care providers, hospitals, and debt
collectors file lawsuits against the consumer. They may use
these lawsuits to seek liens against homes, garnish wages and
tax refunds, seize bank accounts, and even seek civil arrest
warrants when the debtor fails to appear for proceedings.
Between 2009 and 2018, hospitals in Maryland filed nearly
40,000 lawsuits that resulted in wage garnishment, often from
their own employees, according to National Nurses United. Johns
Hopkins alone sought over $4 million in wage garnishment
lawsuits between 2009 and 2018. It has a service area that is
45 percent Black.
The University of Virginia hospital system has a history of
relying on property liens to collect unpaid medical bills, as
Kaiser Health News reported in 2020. As a result of that
expose, the system canceled decades of liens placed on low-
income patients. VCU Medical Center in Richmond, a majority
Black city, filed the most lawsuits of any single hospital from
2018 to 2020, according to researchers from Johns Hopkins.
Worse yet, the ACLU documented cases of arrest for medical
debt in several States, including Maryland, Tennessee, and
Arkansas. In Maryland, they observed the practice of patients
being jailed for medical debts of less than $1,000. The result
of these practices essentially revives debtor's prisons, which
should be illegal in this country.
These debt collection tactics, for obvious reasons, put
fear in consumers, harming not only their financial well-being
but also their physical and psychological well-being. Consumers
may forego or delay medical care because they fear medical
debt, which can harm their physical health and lead to greater
medical expenses in the future. Carrying debt and being
subjected to these debt collection practices also causes
psychological distress, increasing anxiety, depression,
substance use disorders, and other mental health disorders. All
these things can lead to greater medical bills and debt down
the road--a vicious cycle.
So to address this epidemic of medical debt we ask that you
focus on ways to prevent medical debt so that seeking health
care does not send individuals into a financial tailspin. We
ask that you consider consumer protections that address the
racial disparities in medical debt, ban wage garnishment, bank
account seizure, property liens, foreclosure of homes based on
medical debt liens, and civil arrest warrants for medical debt;
prohibit debt collection during health insurance appeals; end
the practice of turning over medical debt to third-party
collectors; prohibit providers and debt collection from
reporting all medical debt to credit reporting bureaus;
enacting universal publicly funded national single-payer health
plan administered at the State and local levels.
There is more detail on these recommendations found in my
written testimony. I do thank you for the opportunity to
testify and I would love to answer any questions you have.
Chairman Brown. Thank you, Ms. Haynes.
We will begin the questioning with Senator Warnock, who has
been advocating for Medicaid expansion in Ms. Haynes' State, as
she noted. Senator Warnock, you are recognized.
Senator Warnock. Thank you so very much, and it is good to
see all of our witnesses, particularly Ms. Haynes from Georgia,
and thank you, Mr. Chairman, for letting me go early due to my
presiding obligations.
The Affordable Care Act allowed States to expand Medicaid
to over 13 million Americans. This is transformational
legislation for our country. But sadly, there are still 646,000
Georgians unable to access free and affordable health care
because State politicians continue to prioritize politics over
people.
I have been fighting for Medicaid expansion long before I
came to the Senate, and when I arrived I fought really hard to
get further incentives for Georgia to expand Medicaid, which we
won in the American Rescue Plan, and the State continues. State
politicians continue to refuse to expand Medicaid, a net loss
to the State and certainly to the 646,000 Georgians in the
Medicaid gap.
And that is why after that I introduced the Medicaid Saves
Lives Act, which would give folks in States like Georgia access
to health care, and I am fighting to close the coverage gap to
ensure that everybody, everywhere, no matter your ZIP Code, has
access to health care.
Ms. Haynes, do we tend to see more medical debt in States
like Georgia that have not expanded Medicaid than States that
have expanded Medicaid?
Ms. Haynes. That is absolutely correct. Households in the
South, the region with the highest concentration of Black
folks, carry more medical debt than other regions. This is
exactly the region, too, where Medicaid expansion has not
really happened. Of the 12 States that have not expanded
Medicaid, eight of them are in the South. That has left many
people uninsured, particularly Black folks. Also many of those
Southern States have a high percentage of for-profit hospitals
too, that are not subject to the charity care provisions of the
ACA.
But that said, the uninsured rate in the South is
definitely connected to the lack of Medicaid expansion and
connected to the increasing levels of medical debt in that
region.
Senator Warnock. So you see a direct link between medical
indebtedness in States like Georgia and its refusal to expand
Medicaid.
Ms. Haynes. Absolutely. The last State, I believe, said
that Georgia has the fourth-highest or third-highest uninsured
rate in the country. I have worked with clients directly in
Georgia who are underinsured or uninsured, facing medical debt,
and trying to figure out whether they need to file bankruptcy,
trying to figure out how they can negotiate some sort of
payment plan. It is definitely at crisis levels in States like
Georgia.
Senator Warnock. Thank you. Medicaid expansion is something
I am focused on, and I will keep pushing for that, but also
capping the cost of prescription drugs would be helpful.
According to the Kaiser Family Foundation nearly 1 in 10
adults, or roughly 23 million people, owe medical debt, and as
of 2020, American families collectively owed over $140 billion
in medical debt. In Georgia, there is over $120 million in
medical debt for over 108,000 folks.
This is unacceptable. People should not have to choose
between getting the prescription drugs they need and groceries.
And this is why I introduced the Capping Prescription Drug
Costs Act and the Affordable Insulin Now Act, which would cap
out-of-pocket drug costs for Americans.
Ms. Stewart, how would proposals that cap out-of-pocket
drug costs like mine alleviate, or help to alleviate the
medical debt crisis in our country?
Ms. Stewart. Thank you, Senator Warnock, and Community
Catalyst supports both pieces of your legislation. Thank you
for that.
It is quite clear, based on the testimony of many people
here, that it is underlying health care costs and people's
inability to afford health care is a major driving factor.
Kaiser Family Foundation also found that of people who have
incurred medical bills that they cannot afford, 53 percent of
them connect them to out-of-pocket prescription drugs costs. So
absolutely, efforts like the one that you are undertaking with
your bills would help the underlying issues and help alleviate
the burden of medical debt.
Senator Warnock. And Kaiser has done work, as I recall, in
the past on the impact of Georgia's refusal to expand Medicaid
on the Georgia economy. It is a drag on people's health care.
It is a drag on the Georgia economy. Is that correct?
Ms. Stewart. That is absolutely correct. There are many
studies showing the connection between Medicaid expansion and
improving overall economic well-being.
Senator Warnock. So we would do well to expand Medicaid in
the 12 nonexpansion States or for us to have Federal
legislation to make sure that folks in those States can access
a Medicaid-like program, and we would do well to cap the cost
of prescription drugs, a net gain for the Georgia economy and
for people's health care.
Ms. Stewart. Absolutely, and it would help millions of
people across the country.
Senator Warnock. Thank you so much.
Chairman Brown. Thank you, Senator Warnock.
Senator Toomey is recognized.
Senator Toomey. Thank you, Mr. Chairman. Dr. Ippolito and
Professor Hyman, let me address this question to the two of
you. And I think you touched on this but I just want to be
clear. Can credit reporting and debt collection policies
actually solve the underlying problem of high or unexpected
medical debt or would that require some health care policy
change? Dr. Ippolito, you can go first.
Mr. Ippolito. Well, yes. So I guess I am going to echo
something Professor Hyman said. But the challenge is that we
are dealing with a clear symptom. Medical debt reflects
something--it reflects something mechanical. A bill was not
paid, obviously, but it reflects the fact that there was a bill
that was potentially quite expensive and there was an inability
to actually pay it.
So the challenge is if we are trying to address this as a
banking system, if we are trying to address this through credit
reporting changes, if we have not actually changed the
underlying risk that the lenders are responding to, for
example, in that case, then the lenders are going to respond
some other way. We have to assume they are going to respond to
the fact that there is some risk that they cannot observe. So
clearly we are going to see some response, and that is where I
worry more about the unintended consequences.
Senator Toomey. Professor Hyman.
Mr. Hyman. Yes, I would echo that. I think you should think
separately about the bills that have already been accumulated
versus the bills going forward. But I do not think changes in
credit reporting practices meaningfully change the debt that is
owed, although they may change the visibility of that debt. And
if you do not do something about the cost of health care you
should expect future medical debt to compound itself rather
than, as I said previously, addressing the root cause of the
problem.
Senator Toomey. Right. And this is one of the reasons I am
concerned that the CFPB seems to be running point on this. They
have no authority to make changes to health care policy, they
do not have any particular expertise in health care policy, and
they certainly are not going to address the underlying
problems.
Let's talk a little bit, if we could, about the effects of
suppressing information. Now I understand that there might be
categories of medical debt that may not be particularly
predictive about a person's creditworthiness. I do not know,
something like hospitalization for a car accident is something
that is obviously completely
involuntary, extremely unusual, could be very expensive if you
do not have insurance.
On the other hand, I think somebody--and, Dr. Ippolito, I
believe it might have been you--pointed out that a very large
majority of unpaid medical debt is under $500, it is a few
hundred dollars, which seems to suggest something closer to a
more routine medical expense, and failure to pay that, maybe
that tells us something different. Maybe that has a different
predictive value with respect to creditworthiness.
Could you talk a little bit about the differences between
different kinds of medical debt in terms of their predictive
value and the unintended consequences that could emerge if that
which has some predictive value is suppressed and is simply
obscured to creditors?
Mr. Ippolito. Yes, I think there are two things there. So
the first thing is you point to one of the big challenges when
you look at the data on this topic is that the distribution of
medical debt often does not look like what you are expecting,
because I think so many of us are thinking car accident. It is
the unavoidable thing that generates a huge bill. It is easy to
understand how that generates a lot of debt.
But that really is atypical when you look at the credit
profiles that the CFPB----
Senator Toomey. That is atypical.
Mr. Ippolito. That is atypical. Yes, that is right. The
typical experience is the median medical collection is $300-
$310, I believe, in 2020. Three-hundred-ten dollars can be
generated in a lot of health care interactions that are not the
catastrophic situations.
So I think your question speaks to the way I think about
this topic, which is that we are seeing something that is an
interaction between two things. One is there is a health care
component, obviously, but there is also a personal finance
component too. And so if you are seeing $300 bills, $200 bills,
$100 bills not getting paid, it is not completely obviously to
me that the answer is, well, it is obviously a health care
problem per se, obviously the cost point notwithstanding, it
seems to me that we have a broader personal finance problem,
that again, suppressing information on a credit panel is not
going to get rid of that risk. It is just going to hide the
risk. And we know people are going to respond because we see it
in other markets. And so that is the core tension I see.
Senator Toomey. Professor Hyman, did you want to comment on
that?
Mr. Hyman. Yes. I would just add I think it is hard to
infer much about the creditworthiness of a particular
individual simply based on the size of the medical bill that
they received, especially if you are looking at bills in
isolation when, you know, a single encounter with a health care
system can result in multiple bills, each of which might be in
collection.
And so the dollar amount is informative of the distribution
but it does not tell you that much about whether there has been
an income shock or ability to repay has been affected or not.
You need more information on that.
Senator Toomey. Thank you. Thanks, Mr. Chairman.
Chairman Brown. Senator Warren, from Massachusetts, is
recognized.
Senator Warren. Thank you, Mr. Chairman.
So this is an important hearing. Medical debt is the most
common form of debt on consumer credit records. It represents
about 60 percent of all consumer debts listed on credit
reports. It totals as much as $140 billion. And for the nearly
1 in 5 Americans with medical debt in collections who are, by
the way, disproportionately Black and Hispanic, it means facing
aggressive and often predatory collection practices that can
ruin your credit, garnish your wages, and drive you into
bankruptcy. It also means that when it damages your credit
score it drives up costs for mortgages, credit card, and other
financial products.
Medical providers often outsource their debt collection to
other businesses. In recent years, one of the big players to
pop up in this space is--surprise, surprise--private equity.
Giant private equity firms have slipped their tentacles across
the health care industry, spending about $750 billion over the
last decade to buy up everything from hospitals to ambulances
to the companies that bill patients and track them down to
collect those debts.
Ms. Haynes, you are an expert on medical debt collection
practices and their impact on families, so let me ask you. How
would you characterize private equity's collection practices?
Does it have a good track record of following the law and doing
right by consumers?
Ms. Haynes. Private equity hospitals and debt collection
are as much a part of the problem in the medical debt crisis as
the other players. They are very aggressive in their collection
practices. They file lawsuits against patients. They harass
them via phone, report their debt to CRAs, even when a debt is
not owed. They are as big a player in the medical debt crisis
as any other players in this crisis.
And I should say that these aggressive debt collection
practices involving liens on homes are particularly damaging.
Hospitals, once they actually seek a lien on a home, it can
really damage the person's current asset value and their
housing stability, ultimately.
Senator Warren. All right. And I just want to underline one
of the phrases you used in there--including when the debt is
not even owed.
Ms. Haynes. Yes.
Senator Warren. I would like to know how much of those $300
medical bills are not even actually owed.
But debt collection is an ideal business for private equity
because their whole business model rests on squeezing companies
and people dry. The standard playbook is to buy up a company,
by loading it up with debt, squeeze the company to extract
profits, then take the money and run after a few years.
In the medical debt collection business that means doing
whatever it takes to collect as much money as possible from
patients, and do it as fast as they can. So it is no wonder
that private equity is gobbling up medical debt collection
firms right and left, rolling them up into consolidated debt
collection giants. In recent years, private equity has been
behind as much one-third of the acquisitions of these
companies.
Ms. Stewart, as the Executive Director of Community
Catalyst, a consumer health advocacy center headquartered in
Boston, you work to protect consumers across the country from
predatory medical debt collections. In your view, is the
consolidation of medical debt collectors under private equity
ownership likely to be in consumers' best interests?
Ms. Stewart. Senator, as you noted the objective of private
equity is, generally speaking, to make big profit and to
attract investors. In the world of health care delivery,
private equity has usually meant rising health care costs,
particularly for people. So if past practice is a predictor of
the future, it is highly unlikely that private equity
consolidating medical collection practices is going to be a
good thing for people.
Senator Warren. Thank you. You know, medical debt is one of
the biggest threats to families' financial security, and I am
glad that the CFPB has taken steps to reduce this risk,
including by pressuring the big three credit reporting agencies
to clear up to 70 percent of medical debt from credit reports.
This is going to boost scores for millions of Americans.
But we also need to crack down on the role that Wall Street
private equity firms are playing in the medical debt crisis,
whether that is providing care, billing, or debt collection. My
Stop Wall Street Looting Act would better align incentives
between private equity and the companies they take over in
order to protect patients and their lives, financial and
otherwise, and make sure that they are not ruined by corporate
greed.
So I think this is an area we need to work on.
Thank you, Mr. Chairman.
Chairman Brown. Thank you, Senator Warren.
Senator Tillis, from North Carolina, is recognized.
Senator Tillis. Thank you, Mr. Chairman. Thanks to all the
witnesses for being here.
I know there are some people that think the CFPB wading
into this space makes sense. I am not one of them. I think we
have seen their expansion of influence through the hostile
takeover of the FDIC by the director. Now we see them wanting
to move into the health care space. And I do think it is a
problem we need to address. I just do not necessarily think
that is the purview of this Committee to deal with it. If you
listen to Senator Warnock, virtually every solution he had to
this problem dealt with Committee subject matter outside of our
jurisdiction.
Dr. Ippolito and Professor Hyman, Senator Toomey mentioned
a few statistics. I just want to make sure that I am right and
see if there are any other indicators we should be following. A
little bit less than 1 percent medical debt is in collections.
Is that right?
Mr. Ippolito. I am not sure what percent of medical debt in
total.
Senator Tillis. Yes. I think it is somewhere around 0.93
percent of all household debt, and only about 8 percent of that
ultimately gets collected.
Now one number that I am curious about is that medical debt
has reduced substantially, about 40 percent since 2009. You
would logically think some of that tracks with the
implementation of the Affordable Care Act and expansion of
Medicaid. Are there any other things that would have
potentially contributed to the reduction in medical debt over
that period of time?
Mr. Ippolito. Well, I mean, broadly speaking I am sure that
the improved economy from about 2010 to now has to have
improved part of what we are seeing there, and other outcomes
on credit reports.
Senator Tillis. Professor Hyman, when you were talking
about if this credit reporting is no longer taken into account
as a predictive indicator, I think you said something to the
effect that lenders would somehow have to respond to that risk.
What would that look like? Give me some examples of unintended
consequences.
Mr. Hyman. So, look, it is hard to make predictions,
especially about the future, to quote Yogi Berra, or maybe it
was Mark Twain. But in any event, you know, as I indicated in
my written testimony, I would expect some increase in credit
scores to happen. But the question would be whether credit
agencies would make adjustments, as Dr. Ippolito indicated.
Senator Tillis. Setting the bar for what may or may not be
a good, or----
Mr. Hyman. Exactly. Basically either modifying the formula
to come up with numbers that actually match more closely the
ability to repay, or moving the bar for what counted as a good
risk versus a bad risk.
With my health care hat on, though, I would point out that
there are potential follow-on consequences within the health
care system, so health care providers may become less willing
to take patients that are unable to pay in full at the time of
service. And I would also expect, as I indicated in my written
testimony, some increased consolidation, because larger
providers are better able to weather this storm than a smaller,
individual practice might be.
Senator Tillis. What other significant potential unintended
consequences can come from addressing the symptom versus some
of the underlying problems that you mentioned in your opening
testimony?
Mr. Hyman. Oh, yes, I apologize for not addressing that.
The other problem, of course, is this is a feedback loop
indicating the problems with the American health care system,
and it is no different than turning off the fire alarm. The
fire is still going. You just no longer have the same evidence
of the underlying problem, and you may not feel the same
urgency to put the fire out.
Senator Tillis. Ms. Haynes, I was more curious than
anything. You mentioned that the Black and Hispanic communities
are disproportionately hit by this. I think you also mentioned
there are two times, or they are likely to be contacted twice
as many times as a White person who may be in medical debt.
Have you looked at it along socioeconomic lines? Is there
much disparity, for example, between a Black, Hispanic, and
White poor family? So, do you understand the question?
Ms. Haynes. Yes. That is actually a really good question.
But the data shows that in ZIP Codes that are predominantly
Black, no matter income, they are more likely to be contacted
by debt collectors than White ZIP Codes and non-Black ZIP
Codes. So actually the data does show that across incomes,
Black folks are still more likely to be contacted by debt
collectors.
Senator Tillis. OK. Thank you. Thank you, Mr. Chair.
Chairman Brown. Thank you, Senator Tillis.
I will ask my questions now, starting with Ms. King. In May
2020, you first received your alarmingly high bill--I know you
have said some of this in your testimony--of $69,000 from the
nursing home that cared for your mother. In October 2020,
shortly after her passing, the nursing home sued you for close
to $80,000.
What impact did this enormous amount of medical debt have
on your life? Did you imagine you would ever be free of this?
Ms. King. In that amount I could not. It was just really
more than I could take in at that time. I was grieving. You
know, my mom had just passed, and I was just trying to figure
it all out, like how could they do this? I said I would not be
responsible, and how am I getting sued.
So I had no idea how I would handle that, how I would take
care of paying that amount, and what were they going to do to
me. So no, I had no idea. It was unbelievable. I felt terrible,
and it was tough. It was ridiculously tough.
Chairman Brown. And fortunately you found legal services
and they found you?
Ms. King. I found legal services and they helped me.
Chairman Brown. And Cleveland has a particularly good legal
services, Legal Aid Society.
Ms. King. Very much so. They are amazing.
Chairman Brown. Thank you.
Ms. Stewart, as we pointed out, medical debt does not mean
someone is a credit risk. It means they got sick. Accidents and
sickness, as all five of our witnesses pointed out, can happen
to anyone at any time, yet people with medical debt are
harassed and often made to feel like a burden to society.
Obviously, medical debt is not the fault of the person who gets
sick.
My question is this. Would you say that our financial
system treats medical debt like a moral failing?
Ms. Stewart. Yes, I would say that our financial system
treats it as an individual moral failing, when it really is a
failing of the financial system and the health system taken
together. As we discussed during this hearing so far, the
health care system is not regulated in terms of health care
costs, and people are bearing the brunt of rising costs, being
forced to pay higher deductibles, higher co-insurance.
And the financial system, in terms of billing and
collection around medical debt does not take any of that into
account, which is why we are really grateful at Community
Catalyst that you are holding hearings like this to have
conversations about systemic reforms that need to take place,
both in the financial systems sector as well as the health
systems sector.
Chairman Brown. Thank you, Ms. Stewart.
My last question, Ms. Haynes. Under pressure, as you know,
Equifax, TransUnion, and Experian just took an important step
to wipe 70 percent of medical debt off credit reports. These
changes will help the financial lives of millions of consumers.
However, that means 30 percent is left, obviously. You have
said in the past that medical debt is not predictive of credit
risk. So since medical debt is not a good indicator of credit
risk, should medical debt even be part of a credit report?
Should all medical debt be prohibited from being reported?
Ms. Haynes. Yes. As I suggested in my recommendations in my
testimony, ideally we should end the practice of turning over
any debt to debt collectors, considering how involuntary and
unpredictable debt from medical emergencies tends to be.
And I should also add that the credit bureaus and the
change that they made, while it is wonderful, there are a
couple of categories of medical debt that is going to be
removed from credit reports. A lot will still remain on
people's credit reports. So debts of less than $500, for
instance, will be removed, debt that has been paid off. And
that will help 15 percent of Americans. But if you look at the
stats from the Urban Institute, the average medical debt
Americans have in collections is $797-$854 for non-White
communities. So those individuals will still be left on the
hook and still see those debts in their credit histories.
Chairman Brown. Thank you. With these changes in how
medical debt is reported I think it is worth considering what
next potential steps the CFPB and others might take to further
lighten the medical debt burden.
Senator Ossoff, from Georgia, is recognized from his
office.
Senator Ossoff. I would like to extend a particular warm
welcome to you, Ms. Haynes. Thank you for joining us and
representing the State of Georgia.
I would like to begin with you as well and ask you, Ms.
Haynes, based upon your knowledge--and then I am going to turn
to Professor Hyman with the same question--how does the
American experience of incurring massive debt because of a
medical emergency, because you or a family member needs a
medical procedure, how does that compare with the experience of
folks in other wealthy countries around the world?
Ms. Haynes. Well, as I noted in my testimony, in terms of
the recommendations, enacting a publicly funded, universal,
national single-payer plan, administrated at the State and
local levels, would go a long way toward remedying this
problem. In various countries outside of the United States they
do have some version of a public option, a public-payer system.
So I will not speak to that in any more detail because I would
have to get back to you about how that would actually look.
But medical debt in this country is a uniquely American
problem, and we need to address it as it stands currently.
Senator Ossoff. Professor Hyman, in the course of your
research, whether or not you have undertaken a formal
comparative analysis with other countries, nevertheless, what
is your impression, your reaction to the same question, how the
American experience of medical debt contrasts with the
experience of folks in other OECD or industrialized, advanced
countries?
Mr. Hyman. So thank you, Senator, for the question. That
has not been the primary focus of my research, but my sense,
based on having done this for quite a while, is that the United
States is an outlier, to say the least, relative to other
countries, in the cost of its health care system, which has
predictable consequences for medical debt.
Other countries vary in their delivery systems as well as
their financing, but the United States is, nonetheless, an
outlier.
Senator Ossoff. Thank you. Ms. Haynes, I spoke with a
fellow Georgian named Felicia from Hogansville, who took care
of her father after he recently suffered a stroke. The family
faced steep medical bills. The impact of that debt has lowered
her credit score and imposed a huge burden on the family. As a
result, she was unable to take out a loan that was necessary
for some home repairs. This is, of course, not an uncommon
story.
Ms. Haynes, folks do not choose to incur medical expenses,
for the most part. Correct?
Ms. Haynes. That is correct. Medical debt tends to be very
unpredictable and involuntary. It usually forces people to
drive up their credit on credit cards, taking out personal
loans. Medical debt really can throw people into a real
financial tailspin.
Senator Ossoff. And as a fellow Georgian, Ms. Haynes, you
are well familiar with the ongoing saga of the State of
Georgia's refusal to expand Medicaid under the Affordable Care
Act, one of just 12 States that has made that decision. Eighty
percent of medical debt is held by households with zero or
negative net worth.
How could Medicaid expansion in the State of Georgia, which
Senator Reverend Warnock and I have fought for, we delivered
resources to make it an even better deal for the State of
Georgia. Georgians are already paying Federal taxes at the same
level as folks in other States but not getting this investment
in public health, forcing low-income and middle-income
Georgians into the emergency room instead of into preventative
health care.
Ms. Haynes, in your opinion, what would be the impact of
Medicaid expansion in Georgia on the burden of medical debt
that is faced by so many of our fellow Georgians?
Ms. Haynes. Yes. Thank you very much for that question.
Georgia, as you know, has one of the highest uninsured rates in
the country. It disparately impacts Black and Latinx families
in Georgia. Expanding Medicaid would not only help in terms of
the rural hospital closures that we have seen in Georgia that
are directly connected to the lack of Medicaid expansion, but
it would also help reduce the medical debt crisis that is
facing many Black and Latinx Georgian families, by making sure
that they are not lost within the coverage gap.
Senator Ossoff. Thank you, Ms. Haynes.
Ms. Stewart, as has been discussed, Equifax, Experian, and
TransUnion recently announced changes to the way that they
score medical debt, and as I understand it now, medical
collection debt under $500 will not appear on consumer credit
reports.
The average amount of medical debt, according to my staff's
research, is approximately $2,400, for those who are carrying
it. So Ms. Stewart, how will the credit reporting agencies'
announcement of this policy change impact individuals who have
more than $500 of medical debt?
Ms. Stewart. Thank you, Senator. Well, for people who have
debt more than $500 they will have an extra year to resolve the
debt, so that is the good news of the policy. But beyond that,
people with debt over $500, it would not be removed from their
credit
report, and that is something that we would encourage CFPB to
pursue and explore.
Senator Ossoff. Thank you all for your well-informed and
concise questions, and Mr. Chairman, thank you for holding this
hearing.
I will just close with this note. You know, it is a
travesty that millions of Americans suffer not just from
illness that they are unable to treat or prevent in the way
that most of us would want and expect because they cannot get
health insurance, but then the burden of debt, at these moments
of stress and crisis for their families. We have widespread
medical debt in this country. We have children with school
lunch debt in this country. We have to stop burdening working
people across the United States with debt for the necessaries
of life like food and health care. And I thank you, Mr.
Chairman, for convening this hearing to shine a light on this
issue.
Chairman Brown. Thank you, Senator Ossoff.
Senator Cortez Masto, from Nevada, is recognized.
Senator Cortez Masto. Thank you, Mr. Chairman. Thank you
for holding this important hearing. And thank you to the
panelists for joining us this morning.
One issue I want to raise here is the issue of medical debt
in Indian Country. For generations the Federal Government has
had a trust and treaty responsibility to provide care to
sovereign Tribal nations, but the volume of medical debt across
Tribal communities is evidence that we have fallen well short
of meeting those obligations.
In 2019, the New York Times report found that Indian Health
Services declined to pay medical bills for more than 500,000
patients, saddling them with more than $2 billion in medical
debt over the preceding 3 years.
Ms. Stewart and Ms. Haynes, how will these changes in
reporting affect Native Americans? And I will start with Ms.
Haynes.
Ms. Haynes. Unfortunately I cannot speak to that particular
issue, but if we are talking about federally held debt you may
be aware of some of the changes related to federally held
medical debt recently, that may go a long way toward helping
consumers avoid some of that, the credit downfall of medical
debt.
Senator Cortez Masto. Thank you. Ms. Stewart.
Ms. Stewart. I would agree with Ms. Haynes. And just to
highlight that one of the big issues with respect to medical
debt and its impact on Native Americans is a lack of data, and
that is something that Community Catalyst is really focused on
making sure that there is more investment and disaggregated
data so that there is much more clarity about the impact on
Native American populations.
Senator Cortez Masto. Thank you, because I sit on the
Senate Indian Affairs Committee, and this is one area, and you
just touched on it, is the lack of data. And because of the
lack of data we are missing out on important services to our
communities, including our Tribal communities across the
country. And we really have to start focusing on those that are
being left behind.
So let me jump to another area, which is the lack of
communication I find here in some of this, and important
information that needs to get out there that is not, at times.
In the recent CFPB report, it was illuminating because it
said that 50 percent of Black respondents in a survey did not
know that hospitals provide free and reduced-cost care for low-
income patients. Now do we know what the level of awareness of
these programs is among Spanish-speaking and other non-English-
speaking communities? I mean, this is a travesty.
Let me just stop there and ask maybe Ms. King or Ms.
Stewart or Ms. Haynes. I am concerned that the information is
not getting out there. And we have a report here showing that
members of our Black community are not getting it. What about
those that have a language barrier? How do we ensure that they
are getting access to this information that is going to be
important for their health?
Ms. Stewart. I will start, Senator. Well first of all there
are no requirements that hospitals, including nonprofit
hospitals, that are, in fact, 501(c)(3) nonprofit
organizations, proactively screen people for financial
assistance programs (FAPs). There are responsibilities to make
information publicly available, but for many, many people they
report that they had no awareness that they were eligible for
financial assistance.
For people for whom English is not their primary language
and need language assistance that is really a very critical
issue. And you can imagine how that issue is expounded when
somebody has a language barrier. So it is deeply concerning
overall, and especially concerning for people who face language
barriers.
Senator Cortez Masto. And what should we be doing about it?
What can Congress do about this, to make sure this information
gets out there?
Ms. Stewart. Well, there could be changes to the nonprofit
community benefit standards to require nonprofit hospitals to
proactively screen people for FAPs prior to billing them. In
addition, there could be financial support for consumer
assistance programs and other community-based organizations who
could be available with resources to offer that kind of
assistance to people.
Senator Cortez Masto. Thank you. Yes, please.
Mr. Hyman. Yes, I would just add that the Affordable Care
Act included requirements for nonprofit community hospitals to
develop a plan and report on the plan, but it did not include
parallel requirements to disclose to patients, along with all
the other things that they do disclose to patients, ``Hey, we
have a charity care program and here are the details on how you
should apply for it.''
So you could do that either with legislation or regulation,
it seems to me, as a condition of participation.
Senator Cortez Masto. Thank you. Yes, Ms. Haynes.
Ms. Haynes. And I just wanted to add those great comments
as well, that in addition to improving the FAP so that folks
are required to screen patients before collecting, there is no
right of action that patients have currently under the
Affordable Care Act to enforce the FAP requirements. So
allowing patients to actually enforce State and Federal FAP
laws in court, to hold violating hospitals liable, would also
go a long way toward improving this charity care.
Senator Cortez Masto. Thank you. Thank you, Mr. Chairman.
Chairman Brown. Thank you, Senator Cortez Masto.
We will wrap the hearing up. Thank you to the five of you
for being here.
As Senator Toomey's charts pointed out, the Affordable Care
Act, especially its Medicaid expansion, not only improved the
health of Americans, but it has also improved their financial
health as well. Thanks to the ACA, States that expanded
Medicaid programs--we know Georgia is an exception--but States
that expanded Medicaid programs saw medical debt fall by 44
percent. Think of that, almost in half.
I would add, parenthetically, I know Senator Cortez Masto
cares so much about this that the implementation of the child
tax credit also dropped the poverty rate by about that number,
40 percent, for America's children.
The ACA Medicaid expansion helped reduce medical debt. Much
more needs to be done. I look forward to working with
colleagues in Congress and at the CFPB to reduce medical debt,
including by creating a medical debt ombudsman. Americans
should be able to focus on their health, not worry about their
financial health, in, as Ms. King pointed out so well, those
particularly difficult times.
To highlight the need for congressional action I will
submit for the record three testimonials, from Mindy Hedges of
Ohio, from Penelope Wingard of Senator Tillis' State, from
Sloane Wesloh from Senator Toomey's State. Without objection,
so ordered.
Chairman Brown. Thanks to the witnesses. For Senators who
wish to submit questions, these questions are due 1 week from
today, on Tuesday, April 5th. To the witnesses, to the five of
you, if you get questions submitted, please submit your
responses for the record within 45 days from the day you
receive them.
The hearing is adjourned.
[Whereupon, at 11:19 a.m., the hearing was adjourned.]
[Prepared statements, responses to written questions, and
additional material supplied for the record follow:]
PREPARED STATEMENT OF CHAIRMAN SHERROD BROWN
Think about watching a loved one rushed to the hospital in an
ambulance. Or learning you have a chronic disease that's going to
require years of care and monitoring. These kinds of medical ordeals
are some of the scariest moments in a family's life.
They can happen at any time, to anyone, without warning. Suddenly
you're coordinating doctor's visits and calls with insurance companies.
You're nervously checking your savings account. You're spending hours
on interminable phone calls trying to get answers.
And you're dealing with it all while worrying whether your husband
or your mother or your child will make it out of the hospital, or
whether their health problems will continue.
As the cost of prescription drugs rise, hospital bills skyrocket,
and debt collectors start calling, families are forced to figure out
how to make ends meet, instead of focusing on their health.
Families all over the country are telling us that.
We heard from Penelope Wingard, an after-school teacher from North
Carolina, who lost her health coverage while battling breast cancer.
When her medical bills began to pile up, her doctors eventually stopped
seeing her.
Soon after, Ms. Wingard had an aneurysm, in addition to vision
loss, both of which required surgery. Because of the financial
situation caused by her cancer diagnosis, Ms. Wingard was forced to
wait and seek care from a limited list of providers who allow sliding
scale payments.
Debt collectors call her--harass her--every single day. And now her
credit is ruined because of her health.
Right now, Ms. Wingard needs additional testing to ensure her
cancer has not returned, which has added an additional $2,000 to her
debt. Instead of focusing on battling her illness, she has to figure
out how to battle the debt collectors.
And Ms. Wingard is far from alone.
In the United States, an estimated 43 million Americans hold $88
billion dollars of medical debt on their credit reports, and this
problem is growing. It can happen to anyone. Low-income families, Black
and Hispanic households, veterans, young adults, and older Americans
are hit particularly hard.
And debt collectors make this already exhausting experience worse.
They call over and over, they make threats, they even contact
patients' employers.
Take for example, Mindy Hedges, from Delaware County, Ohio. She has
had type 1 diabetes since she was 5-years old.
For most of her adult life, until the passage of the Affordable
Care Act, she was unable to get health insurance because she had a
preexisting condition.
After losing her business in the 2008 recession, her medical bills
began piling up, and she was unable to re-pay them. That's when the
debt collectors started calling. And calling. And calling. And calling.
Ms. Hedges did her best--she tried to negotiate, she even begged
for relief. But the harassment continued. At one point, she was even
afraid to leave her house.
That harassment is part of the business model.
A counsel at a medical debt collection agency owned by a private
equity firm had some choice words about harassing patients--they said
they found the first 20 to 30 calls to be, quote, ``highly effective.''
If the calls don't work, debt collectors often move on to even more
aggressive tactics like litigation--forcing people to go through
lengthy, expensive, and emotionally draining court proceedings, often
while still battling cancer or grieving a loved one.
For patients, litigation can result in garnished wages or property
liens. We even see people thrown in jail because they couldn't afford
to pay. It's the return of debtor's jail. People in the United States
of America today are in jail, right now, because of medical debt.
And of course, wherever we find suffering, Wall Street finds an
opportunity.
Private equity firms are making inroads in the medical debt
collection market. Between 2015 and 2016, one-third of all debt
collection agency acquisitions were bought by private equity.
These firms exist purely to maximize investor profit, no matter the
cost.
Maybe that's why private equity-owned debt collection agencies are
responsible for an outsized number of consumer complaints--many
concerning attempts to collect debt from people who do not owe them.
We must address the growing crisis of medical debt burdening
American families.
President Biden and his Administration are working to remove
barriers to medical debt forgiveness for veterans, and to make it
easier and cheaper for them to get care.
No one who served this country should be saddled with debt for
illness or injuries incurred in the line of duty.
And the Biden administration has wasted no time in implementing the
No Surprises Act, which took effect on January 1st.
This bipartisan law finally bans surprise medical bills. One way to
prevent debt collector harassment is to protect people from debt in the
first place.
The Consumer Financial Protection Bureau is also doing important
work exposing the abuses Americans face while just trying to get health
care.
And after increasing scrutiny and pressure, the three credit
reporting bureaus--Equifax, Experian, and TransUnion--all announced
they would significantly change how medical collection debt is
reported. These changes are expected to remove nearly 70 percent of
medical debt in collections from credit reports. This is a positive
first step.
And this first step by the credit reporting bureaus gets to a basic
fact that we too often ignore: medical debt does not correlate with
credit risk, it correlates with illness.
It should be obvious--anyone can get sick. Anyone can get in a car
accident. It has nothing to do with your ability to pay your bills--or
it shouldn't.
No one should be forced into poverty or harassed by shady debt
collectors because of a medical emergency, or a sick family member.
We've taken important steps to protect Americans. But can we do
more.
I'm asking the CFPB to create an ombudsman position for consumer
medical debt.
It's also why expanding Medicaid coverage to those who live in the
12 States that have refused to expand Medicaid under the Affordable
Care Act is long overdue. I'm appreciative of two Members of this
Committee, Sen. Warnock and Sen. Ossoff, who are working to finally get
this done.
Of course, meeting these challenges cannot be done by the
Government alone.
Private industry must act. This country needs private institutions
to meet their obligations of financial assistance and the No Surprise
Act.
Today we're hearing from two advocates for consumers, as well as
one of my constituents, Robyn King, from Cleveland. Ms. King will tell
her story of battling medical debt she never owed, after a nursing home
cared for her mother.
I look forward to hearing more about how we can protect Americans
from medical debt and debt collector harassment. No one should have
their financial future ruined because they get sick.
______
PREPARED STATEMENT OF SENATOR PATRICK J. TOOMEY
Thank you, Mr. Chairman.
Pricing risk accurately is critical to the safety and soundness of
financial institutions, and to consumers' ability to access affordable
credit. Because when borrowers default, lenders have to absorb the
costs. That's why lenders generally look at information about credit
history--it helps them estimate the risk of default and price loans.
Lenders who cannot access information that they consider predictive
of risk are likely to restrict their lending to the borrowers with the
thickest credit files, seek out relevant proxies for the credit
information they aren't able to obtain, or increase the price of loans
to all borrowers in order to capture the uncertainty and risk.
This hurts all consumers, including low-income families and those
without a long credit history. For all of those reasons, the Government
should not suppress the reporting of accurate credit information.
Unfortunately, so-called consumer groups and allies have sought to
remove info from credit reports and thereby make them less accurate.
I'm afraid such actions will have unintended consequences.
Today's hearing title is the ``Growing Burden of Medical Debt''.
It's an interesting but inaccurate title. Evidence suggests medical
debt is actually falling, not growing.
According to the CFPB's own estimate, medical debt in collections
last year was $88 billion. That's a nominal reduction of 10 percent
over the last 3.5 years.
Another study showed that average medical debt in collection fell
by 40 percent in the last decade. Yet over the same period, medical
spending increased 70 percent--over 50 percent per capita.
Now, there are likely many reasons for a decline in medical debt. A
primary driver was the improving economy. After tax reform in 2017,
those with the lowest wages--those most likely to have medical debt--
were making the biggest gains in income.
Another driver of the decline was the enactment of Obamacare and
Medicaid expansion. Researchers estimate that for every $25 spent on
Medicaid expansion, medical debt in collections decreased $1.
There are many aspects that have made me question the wisdom and
efficacy of Medicaid expansion, including its cost and the lack of
evidence that it improved health outcomes. But, unsurprisingly, if
you're willing to spend massive amounts of other people's money, you
can transfer individuals' debts onto the taxpayers.
So all available evidence suggests there is no ``growing'' burden
of medical debt. In fact, the scale of medical debt is often
misunderstood. Debt in collections represents less than 1 percent of
all household debt. Two-thirds of medical debt collections are under
$500. Bankruptcy from medical debt is extremely rare.
And medical debt is not strictly an American phenomenon. Every
health care system in the developed world includes out-of-pocket
payments.
According to the WHO, even before Medicaid expansion, the
likelihood that out-of-pocket expenses would exceed a quarter of one's
income was roughly as rare in the United States (0.8 percent) as Canada
or the United Kingdom (0.5 percent), and rarer than in Italy (1.1
percent), Spain (1.8 percent), Korea (3.9 percent), or Switzerland (6.7
percent).
Recently, credit reporting agencies announced changes that will
reduce the amount of medical debt that appears on consumer credit
reports going forward.
Now, if a credit reporting agency decides to exclude this
information, I don't think it's the Government's role to meddle with
such a decision. However, if credit reporting agencies had collectively
decided the opposite--that every one of them would begin at the same
time to add consumers' medical debt info onto reports--I suspect the
howls and protests about greed and collusion from the usual suspects
would have been deafening.
What appears to have occurred here was that a political campaign,
which included the CFPB, bullied lenders and credit-rating agencies
into removing this information. This kind of misuse of power by the
administrative state has grown all too common. And it's an example of
how Congress has become far too comfortable with the Executive branch
seizing the Article I lawmaking authority.
We need to be very careful that any actions considered to address
symptoms--in this case debt from a health condition--don't make matters
worse. This new credit reporting agency policy doesn't actually lower
the cost of medical care. In fact, it will either raise costs or reduce
access.
It may end up discouraging people from paying medical bills. That
could lead to health care providers finding ways not to treat
individuals without an obvious means to pay. And by eliminating one
metric in a credit rating, it may cause credit rating agencies to use
other metrics that are less accurate, which could actually hurt low-
income populations more.
These kind of downstream effects wouldn't be shocking given that
the entire effort to micromanage credit ratings is coming from an
agency that has no expertise on complex medical billing and health care
systems.
It should remind us that intervention into the market--no matter
how noble advocates may think they are being--will have consequences.
And interventions should come after careful deliberation by the
people's representatives, not diktats from unelected bureaucrats.
______
PREPARED STATEMENT OF ROBYN M. KING
of Ohio
March 29, 2022
Good morning. It is an honor to be here today, and it is a
privilege to be able to share my story with you, Members of the U.S.
Senate Committee on Banking, Housing, and Urban Affairs.
I am here to speak about my experience with medical debt. It's
something that affects thousands and thousands of people in this
country every year, and I know firsthand that the consequences of these
burdens can be debilitating. I was lucky enough to get professional
legal help from the attorneys at Legal Aid in Cleveland, but many
people are not so lucky. For them, and for others who have yet to be
victimized, I share my story.
I am a mother with three children, my youngest still in high
school. I worked as a teacher's assistant for 10 years, and recently
transitioned to working part-time at a Learning Center. I still
volunteer with children and older adults in my spare time. I'm also the
youngest of six siblings who all cared deeply about our Mom.
If you've ever brought a parent or loved one to a nursing home,
knowing they will live out their final days there, knowing you are
trusting all of their care and comfort to strangers--that's a day you
will never forget. I clearly remember walking into Jennings Nursing
home, with the support of my five siblings, wondering if my mother, who
had Alzheimer's, could grasp what was really going on. The group of us
decided I would be Mom's representative for the nursing home admission
agreement and sign all of the paperwork that allowed my Mom to be
admitted into the facility.
My Mom's Social Security checks were used to pay for her portion of
the nursing home bill, and Medicaid covered the rest. Knowing that my
finances were already tight, I made sure to check the box on the
nursing home admission form which said I did NOT agree to be personally
liable if finances for my Mom's medical care ran out. I have a
household of my own to take care of and knew that I couldn't afford to
have the nursing home come after me for my Mom's medical care.
In November 2019, nursing home staff told me Mom's Medicaid needed
to be reinstated, so I went to the office and filled out some more
forms. I didn't hear anything from them about Medicaid for months, so I
assumed everything had been taken care of.
When COVID hit and the world shut down, I was especially worried
about how lonely Mom must be as there was no way for my siblings and me
to continue visiting her as often as we normally did. But it was a
shock when the nursing home told me in May 2020 that Mom's Medicaid
actually hadn't been reapproved many months earlier and that I was
suddenly on the hook for paying a huge bill.
They said, well, too bad, she is going to have to leave here and go
somewhere else. But where else could she go, especially in the middle
of the pandemic? Why hadn't they told me this months ago? How could
they have kept this information from me, when I always did everything
they asked me to do?
But because the nursing home took so many months to tell me that
Medicaid had stopped paying my Mom's bills, the amount she owed had
grown huge--the nursing home was trying to collect almost $70,000 when
I first learned of this issue. And while I tried frantically to fix the
situation, the nursing home started chasing after me, sending bills
each month in escalating amounts.
My Mom passed away on October 3, 2020. It was just two days before
that, on October 1st, that I had received mail which said that I was
personally being sued by the nursing home for close to $80,000.
I never had time to grieve. I kept so much inside; the stress was
unbearable. I thought, I won't be able to afford my mortgage--I am
definitely going to lose my house. I could face a garnishment of my
paycheck and be forced to live on a reduced income when money was
already tight to begin with. What will I tell my kids? What does it
mean, to have this kind of judgment against you, how will that impact
the rest of my life? At one point I even thought--I'd rather be with my
mother. I felt defeated. I had nothing left to give.
The lawsuit made no sense to me since I told the nursing home that
I would not be personally responsible for any of Mom's medical
expenses. On my sister's advice, we called Legal Aid--and it was just
in time. I am incredibly grateful for my attorneys' help because they
knew exactly what to do, they walked with me every step of the way, and
they helped free me from the responsibility to pay the nursing home
debt with my own money.
The nursing home is still pursuing my Mom's estate for what is
owed. So--it's still impacting my life. While I'm not personally on the
hook for the debt, they're still going after my family's assets.
As I stand here today, I cannot tell you how relieved I am to know
I can keep my home, keep providing for my kids, keep my life as it is.
There is no reason I should go into massive debt so that my mother
could live out her final months in a safe and comfortable place, with
her basic needs met. There is no reason my family's ability to build a
better future for ourselves should be wiped out because my Mom got sick
and we got her the medical care that she needed. There is just no
excuse for this in America.
I want my story to shed light on what's happening to normal,
everyday people in this country who are just trying to care for
themselves and one another.
I hope you can take action to protect people like me and not allow
medical debt to upend people's lives. Medical care, and end-of-life
care especially, is not something we can opt out of. Getting sick or
having a family member get sick should not force people to face
crushing amounts of debt. I thought that I had done everything right in
taking care of my Mom, but without the good fortune of having Legal Aid
represent me, I would have had an enormous judgment against me, and my
family's financial future would have been devastated. There must be a
better way to take care of each other and not leave people like me
facing life-changing amounts of debt.
I do still believe in the positive potential of every day, and I
hope that today, you can help me turn my story into something positive.
Thank you.
______
PREPARED STATEMENT OF EMILY STEWART
Executive Director, Community Catalyst
March 29, 2022
Good morning, Chairman Brown, Ranking Member Toomey, and Members of
the Committee. Thank you for the opportunity to speak on the important
issue of medical debt this morning.
My name is Emily Stewart, I am the executive director of Community
Catalyst, a national nonprofit organization with a mission to build the
power of people to create a health system rooted in race equity and
health justice and a society where health is a right for all.
While great progress has been made in expanding access to coverage
and care since passage of the Affordable Care Act, more must be done to
expand comprehensive coverage and make care affordable. Thirty million
Americans remain uninsured\1\ and many insured individuals face high
deductibles and copayments if illness or injury strikes. When a
person's medical bills exceed what they can pay, they are saddled with
medical debt. There are many sources of medical debt, with the largest
share arising from emergency room visits, hospitalizations, dental
care, and diagnostic tests like x rays and MRIs.\2\
U.S. Census Bureau data estimate that 17 percent of U.S. households
held at least $195 billion in medical debt in 2019.\3\
Who has medical debt? To start, the uninsured. More than one-third
of people with no insurance have medical debt. Many of them are living
in States that have not expanded Medicaid. People in these States also
have a greater number of accounts being sent to collection when
compared to residents of Medicaid expansion States.\4\
Additionally, 22 percent of insured people have outstanding medical
bills.\5\ This means just about anyone is at risk of incurring medical
debt, especially as insurance deductibles, copayments and coinsurance
increase year after year.
Some people are at greater risk. As a result of discriminatory
barriers to affordable coverage and care, there is a disproportionate
effect on people of color, with nearly 27 percent of Black households
and just under 19 percent of Latinx families having medical debt.\6\ In
addition, households with income of less than 133 percent of the
Federal poverty level are more likely to have problems paying medical
bills. Families in households with children are far more likely to have
medical debt than those with no children in the household. Families in
which a member has a disability are nearly twice as likely to have
medical debt as those families in which no family member has a
disability.\7\
Medical debt problems result from inadequate insurance, complicated
insurance claim procedures and opaque billing and collection systems.
People with medical debt often are forced to exhaust their savings to
pay for medical bills, and consequently reduce their spending on food,
clothing, and other household items, borrow money from friends or
family members, or take on additional debts.\8\ Thirty-seven percent of
people with medical debt or billing problems used up all their savings
to pay their medical bills, 31 percent took on new credit card debt,
and 11 percent took out a mortgage against their home or took out
another type of loan to pay their medical bills.\9\
Many others saddled with high medical debt delay needed care to
avoid incurring more bills.\10\ The implications of this problem were
made obvious over the past 2 years, as we have encouraged people to
seek testing and treatment for COVID-19. Living with outstanding
medical bills also creates health problems, causing stress that can
lead to poor physical and mental health.\11\
How do people hold debt? We know that medical debt comes in various
forms: money owed directly to hospitals and providers; bills owed
providers that that are being pursued by third-party collection
agencies; payments for care that has been charged to credit cards;
loans from companies that specialize in financing medical debt; and
medical accounts that have been purchased by debt buyers.
Unfortunately, we do not know precisely the amount of debt in these
different categories.
Some medical debt is masked as credit card debt. Several studies
have found that one-third of those with credit cards have ongoing
credit card debt because of medical bills.\12\ \13\ Analysis of payment
patterns conducted by the JPMorgan Chase Institute illustrates the
lingering effects of medical debt. They found that younger families are
more likely to take on revolving credit card debt and older adults have
elevated levels of credit card debt one year after making a medical
payment of $1,500 or more.\14\
In recent years we have seen a growing number of financial service
firms that partner with providers on loans or payment plans. There are
medical credit cards, often with high interest rates.\15\ Other
companies claim to partner with hospitals or providers to offer
flexible low-interest patient loans.\16\ Some issue patients a health
care payment card to be used at any time for health-related
expenses.\17\
Who owns medical debt? Who holds the debt can make a huge
difference in whether a person's medical bill problem is alleviated or
aggravated. Many hospitals and providers offer extended payment plans,
with no interest, directly to their patients. Nonprofit hospitals are
obligated to provide charity care or financial assistance, but many
people are unaware of these programs. The Washington State Office of
the Attorney General recently filed lawsuits against two Washington
hospitals alleging that employees were trained using scripts that gave
patients the impression that they were expected to pay for their care,
failing to notify them that they were eligible for financial
assistance.\18\
There are many stories we could share; here are two from partner
organizations:
This story is from our Illinois partners (Illinois Coalition
for Immigrant and Refugee Rights, Mujeres Latinas en Accion,
Southwest Suburban Immigrant Project, Mano a Mano Family
Resource Center, Legal Council for Health Justice and Enlace
Chicago)--A noncitizen patient with work authorization, became
ill with COVID-19 complications, was rushed to the emergency
room and billed $11,798. The hospital denied the patient any
financial assistance even though State law should have
permitted the patient a full discount, and Federal assistance
programs were in place for COVID-19-related services. The
patient paid over $1,000 out-of-pocket over a few months out of
fear that the bill would impact his immigration status and
ability to buy a home.
And this story is from our New Mexico partners (New Mexico
Center on Law and Poverty, Casa de Salud and Forward
Together)--A pregnant patient was told the cost to deliver a
baby was $10,000, but she was never informed of financial
assistance or Medicaid options. Instead, she planned to sell
her personal belongings until a family member got involved and
helped her apply for Medicaid. She later received a bill for an
ultrasound. A nurse told her it should be covered, but the
unpaid bill showed up on a credit check three years later,
which severely damaged her ability to buy a house.
For many people, the headaches begin when bills are sent to third-party
collection agencies. These agencies are paid a percentage of the debt
they collect. They typically report the accounts to the credit bureaus
and, if not paid promptly, pursue legal action.
Private equity firms are also getting into the medical bill
collection space. These companies are investing heavily in updating and
scaling their collection services through technology. It is reported
that there has been a surge in demand from hospitals for their services
and that these companies are very profitable and attractive for
investors.\19\ This will likely make it even more difficult for
patients to negotiate reasonable payment plans directly with their
local hospitals and providers.
Is the debt even owed? Medical debt can ruin an individual's credit
rating. Research from the Consumer Financial Protection Bureau (CFPB)
found that 58 percent of collection accounts on credit reports are
medical bills. These accounts are reported by third-party collection
agencies; they often lack accurate or updated information from the
original health care provider. While the CFPB estimates that $88
billion in medical collections sit on consumer credit reports, other
estimates range from $81 billion to $140 billion.\20\
Many medical collection amounts are fairly low-dollar value. Sadly,
a high proportion of reported accounts are for disputed bills. Analysis
of collection complaints submitted to the CFPB found that nearly two-
thirds (63 percent) of complaints assert that either the debt was never
owed, not verified as the consumer's debt, already paid, or discharged
in bankruptcy.\21\ One complainant stated that ``that agency had me
served with court papers. for medical bills. They had already been paid
in full by my insurance company.'' Another said the collector
``garnished my husband's check for almost $300 for bills we did NOT
owe!''
CFPB research has found medical collections are less predictive of
future consumer credit performance than nonmedical collections. This
has been acknowledged by the credit scoring industry and has resulted
in changes to some scoring models. These revised scoring models either
give less weight to medical collections or ignore paid collections when
calculating scores. Given this, we welcome the CFPB's investigation of
whether medical collections should be eliminated from credit reports
altogether.
What are debt collection practices? Third-party collection
agencies, acting on behalf of hospitals and other providers, often
pursue lawsuits. Legal actions include garnishing wages, putting liens
on patients' homes and bank accounts, and even issuing civil arrest
warrants for people who do not comply with repayment terms.
Numerous press reports have detailed people having their wages
garnished or bank accounts frozen.\22\ One report found that more than
one-quarter of the top 100 hospitals, based on patient revenue, sued
patients for medical bills between 2018 and 2020.\23\ In New York
State, 55 hospitals had sued over 4,000 patients since the pandemic
began, including the State's largest health system, which sued more
than 2,500 patients during this time period.
For-profit hospitals have also been aggressive in using lawsuits to
collect from patients. Despite receiving $700 millions of dollars in
COVID-19 relief funds, one for-profit chain filed thousands of lawsuits
against patients struggling to pay their bills. In the early days of
the pandemic, they garnished the wages of one patient making roughly
$850 a month for a $9,000 bill resulting from an emergency visit due to
food poisoning that had occurred two years before.\24\ Even publicly
owned, governmental hospitals, took legal action, with one West
Virginia hospital being responsible for close to 18,000 lawsuits.\25\
Early on in the pandemic in 2020, one family was surprised that their
debit card was declined while purchasing groceries. They later learned
that their bank account was locked due to medical debt owed to a
hospital.\26\
It may be shocking to learn that people can even end up going to
jail due to medical bills. Yes, medical debtor prison is a possibility.
One Kansas family incurred $70,000 in bills from their son's leukemia
treatment and the mother's seizures related to Lyme disease. After the
father missed a court appearance about these bills, and was unable pay
bail set at $500, he was sent to jail.\27\ In an incident from another
Kansas hospital, a women spent six hours in jail, paying a $250 bond,
which went toward the judgement obtained for her medical bills. A
lawyer then warned that if the judge issued another warrant for her
arrest, bond the next time would be set at $500.\28\ An Idaho woman,
who was unaware that she owed $950 from care received years before,
only learned of it when deputies arrived at her door. ``They handcuffed
me and took me down to the jail to put me in booking.'' They held her
briefly until reaching the collection attorney who worked out a $20 per
month payment plan, as the woman didn't make enough money for her wages
to be garnished. She said it was the first time she had ever been to
jail and that she was terrified.\29\
Recommendations
1. Extend Medicaid coverage to protect residents of States that have
not yet expanded Medicaid.
2. Strengthen nonprofit hospital Section 501r protections to
prohibit wage garnishments and liens on primary residences,
require more generous financial assistance and extend
protections to include the services of any provider of care in
a hospital or health system.
3. Extend Section 501r protections to for-profit hospitals and
health systems.
4. Promote cross-agency collaboration to facilitate patients' access
to insurance coverage and FAPs of health care providers.
5. Provide funding to State consumer assistance programs to assist
people in identifying coverage and resolving medical debt
problems.
6. Encourage the Department of Health and Human Services to:
a. Include a requirement in the No Surprises Act (NSA) final rule
that providers must screen uninsured patients for public
insurance programs and hospital financial assistance in
addition to providing good faith estimate of the cost of
services.
b. Monitor the NSA implementation to ensure that patients are not
billed, nor coerced into paying amounts exceeding those allowed
under this law.
7. Extend protections through funding COVID-19 testing and treatment
for uninsured people.
8. Establish an ombudsman office within the Consumer Financial
Protection Bureau to resolve complaints involving medical
collections and credit reporting and require the office to
issue annual reports.
9. Support the CFPB's actions to:
a. Hold credit reporting companies accountable for having
reasonable procedures in place to assure that medical debt
information is accurate and taking action against furnishers
who report inaccurate information.
b. Conduct additional research on medical billing collection
practices and their impact on patients and families.
c. Determine whether policies should be implemented to eliminate
unpaid medical billing data on credit reports altogether.
Thank you for the opportunity to testify and I welcome your
questions.
Endnotes
1. Kenneth Finegold, Ann Conmy, Rose C. Chu, Arielle Bosworth, and
Benjamin D. Sommers. ``Trends in the U.S. Uninsured Population,
2010-2020''. ASPE, February 11, 2021. https://aspe.hhs.gov/sites/
default/files/private/pdf/265041/trends-in-the-us-uninsured.pdf
2. Kaiser Family Foundation/New York Times Medical Bills Survey
(conducted August 28-September 28, 2015). https://www.kff.org/wp-
content/uploads/2016/01/8806-the-burden-of-medical-debt-results-
from-the-kaiser-family-foundation-new-york-times-medical-bills-
survey.pdf
3. Kaiser Family Foundation (2022). ``The Burden of Medical Debt in the
United States''. https://www.kff.org/health-costs/press-release/1-
in-10-adults-owe-medical-debt-with-millions-owing-more-than-10000/
4. Raymond Kluender, Neale Mahoney, Francis Wong, and Wesley Yin.
``Medical Debt in the United States, 2009-2020''. JAMA. 2021;
326(3):250-256. doi:10.1001/jama.2021.
5. Findings from the Commonwealth Fund Biennial Health Insurance
Survey, 2020. https://www.commonwealthfund.org/publications/issue-
briefs/2020/aug/looming-crisis-health-coverage-2020-biennial
6. U.S. Census Bureau, Survey of Income and Program Participation,
Survey Year 2020.
7. U.S. Census Bureau (2021). https://www.census.gov/library/stories/
2021/04/who-had-medical-debt-in-united-states.html
8. Peterson-KFF Health System Tracker (2022). ``Many Households Do Not
Have Enough Money To Pay Cost-Sharing in Typical Private Health
Plans''. https://www.healthsystemtracker.org/brief/many-households-
do-not-have-enough-money-to-pay-cost-sharing-in-typical-private-
health-plans/
9. Findings from the Commonwealth Fund Biennial Health Insurance
Survey, 2020. https://www.commonwealthfund.org/publications/issue-
briefs/2020/aug/looming-crisis-health-coverage-2020-biennial
10. Peterson-KFF Health System Tracker (2022). ``Many Households Do Not
Have Enough Money To Pay Cost-Sharing in Typical Private Health
Plans''. https://www.healthsystemtracker.org/brief/many-households-
do-not-have-enough-money-to-pay-cost-sharing-in-typical-private-
health-plans/
11. Wiltshire, et al. ``Problems Paying Medical Bills and Mental Health
Symptoms Post-Affordable Care Act''. AIMS Public Health. May 6,
2020. http://www.aimspress.com/article/10.3934/publichealth.2020023
12. https://www.lendingtree.com/credit-cards/study/cardholders-credit-
card-debt-due-to-medical-bills/
13. Demos (2007). ``Borrow To Stay Healthy: How Credit Card Debt Is
Related to Medical Expenses''. https://www.demos.org/sites/default/
files/publications/healthy-web-0.pdf
14. ``Coping With Costs'' (Feb 2021), JPMorgan Chase Institute. https:/
/www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/
institute/pdf/institute-coping-with-costs-report.pdf
15. https://www.carecredit.com/faqs/#whatiscarecredit
16. https://www.myaccessone.com/Home/Faq
17. https://payzen.com/
18. https://www.atg.wa.gov/news/news-releases/ag-ferguson-files-
lawsuit-against-swedish-other-providence-affiliated-hospitals
19. Private Equity Stakeholder Project (2021). ``How Private Equity
Profits From Aggressive Medical Debt Collection''. https://
pestakeholder.org/how-private-equity-profits-from-aggressive-
medical-debt-collection/
20. ``Medical Debt Burden in the United States February 2022''. https:/
/files.consumerfinance.gov/f/documents/cfpb-medical-debt-burden-in-
the-united-states-report-2022-03.pdf
21. U.S.PIRG (2017). ``Medical Debt Malpractice Consumer Complaints
About Medical Debt Collectors, and How the CFPB Can Help''. https:/
/uspirg.org/sites/pirg/files/cpn/USN-012518-A3-REPORT/Medical-Debt-
Malpractice-2.html
22. Health Affairs (2021). Hospital Lawsuits Over Unpaid Bills
Increased By 37 Percent In Wisconsin From 2001 To 2018. https://
www.healthaffairs.org/doi/10.1377/hlthaff.2021.01130
23. Axios, Johns Hopkins University (2021). ``How America's Top
Hospitals Hound Patients With Predatory Billing''. https://
www.axios.com/hospital-billing
24. Casey Tolan. `` `There's No Way I Can Pay for This': One of
America's Largest Hospital Chains Has Been Suing Thousands of
Patients During the Pandemic''. CNN Investigates, May 18, 2021.
https://www.cnn.com/2021/05/17/us/hospital-lawsuits-pandemic-invs/
Index.html
25. Axios (2021). ``America's Biggest Hospitals vs. Their Patients''.
https://www.axios.com/hospitals-patients-lawsuits-billing-4bfa93b2-
3bbf-48a5-b8e2-2f8a68c533a9.html
26. ``Hospitals in West Virginia Are Seizing Bank Accounts, Garnishing
Wages Over Unpaid Debt During Ongoing COVID-19 Pandemic'', Times
West Virginian, April 2020. https://www.timeswv.com/news/hospitals-
in-west-virginia-are-seizing-bank-accounts-garnishing-wages-over-
unpaid-debt-during-ongoing/article-2570a96e-82ac-11ea-b6cb-
1f200dcac618.html
27. ``Dad in Kansas Jailed Over Medical Debt From Son's Leukemia
Treatments and Wife's Seizures'', People Magazine February 2020.
https://people.com/health/dad-jailed-over-medical-debt-from-sons-
leukemia-treatments-and-wifes-seizures/
28. ``Thousands Visiting an Olathe Hospital Were Sued for Medical Debt.
Dozens Went to Jail'', KLC Journal, June 2020. https://
klcjournal.com/olathe-hospital-medical-debt/Of-the-judgments-
recorded-publicly-for-Emergency-Medicine-Care
29. ``Why Some Idahoans Are Being Served, Arrested and Sometimes Jailed
Over Medical Debt'', East Idaho News.com, May 2019. https://
www.eastidahonews.
com/2019/05/why-some-eastern-idahoans-are-being-served-arrested-
and-sometimes-jailed-over-medical-debt/
______
PREPARED STATEMENT OF BENEDIC N. IPPOLITO
Senior Fellow, American Enterprise Institute
March 29, 2022
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
PREPARED STATEMENT OF DAVID A. HYMAN
Scott K. Ginsburg Professor of Health Law & Policy,
Georgetown University Law Center
March 29, 2022
I have organized my testimony around four key points:
1. Quantifying medical debt involves both methodological choices and
definitional uncertainty.
2. Medical debt is a function of multiple interactive factors.
3. Modifications to credit reporting of medical debt may provide
some relief but is also likely to have unintended consequences.
4. Medical debt is a symptom of a larger problem, which will not be
solved by changes in credit reporting practices. If we want to
fix the problem of medical debt, we should be focusing on
making health care cheaper.
Quantifying Medical Debt: Methodological Choice and Definitional
Uncertainty
Researchers have generally used credit reports to generate
estimates of total medical debt, based on bills from medical providers
that are unpaid and have been sent to a collection agency and reported
to a credit reporting agency. There are good reasons to use this
approach; credit reports are objective sources of quantifiable
information, and if an account is labeled as coming from a medical
provider, it is unlikely to be attributable to nonmedical debt.
According to a recent report by the CFPB using this approach, about
20 percent of credit reports include such ``medical collections,''
totaling approximately $88 billion. \1\ Other estimates use the same
approach. \2\ These studies indicate that medical debt is not evenly
distributed across the population, and a modest number of outliers are
responsible for a heavily disproportionate share of total medical debt.
The same studies find that higher medical debt is more likely among
certain sub-groups of the population.
---------------------------------------------------------------------------
\1\ CFPB, ``Medical Debt Burden in the United States (2022)'', at
https://www.consumerfinance.gov/dataresearch/research-reports/medical-
debt-burden-in-the-united-states/.
\2\ See, e.g., Raymond Kluender, et al. ``Medical Debt in the
United States, 2009-2020''. 326 JAMA 250-256 (July 20, 2021), https://
jamanetwork.com/journals/jama/article-abstract/2782187 (estimate of
$140 billion); Michael Batty, Christa Gibbs, and Benedic Ippolito.
``Unlike Medical Spending, Medical Bills in Collections Decrease with
Patients' Age'', 37 Health Affairs 1257-1264 (July 25, 2018), https://
www.healthaffairs.org/doi/full/10.1377/hlthaff.2018.0349 (estimate of
$81 billion).
---------------------------------------------------------------------------
There are several distinct problems with using this credit report-
based approach to determining the amount of medical debt--let alone
evaluating whether there are any time trends in the total amount of
medical debt.
All of these studies are based on data from a single credit
reporting agency, and all three employ the same definition of medical
debt (i.e., a medical bill that is sent to collections). The first
problem is that not all medical debt that is sent to collections is
reported to all three credit reporting agencies--so reliance on a
single agency will predictably miss at least some amount medical debt.
The second problem is that not all medical debt is sent to
collections--so reliance on collections data will predictably miss some
medical debt as well. The third problem is that not all debt
attributable to medical evaluation and treatment is reported as medical
debt. For example, patients can pay some of their medical bills
(including deductibles and copayments at the point of service) with a
traditional credit card. Alternatively, they can use a credit card
designed and marketed to cover health care expenses. \3\ Finally, they
can tap other sources of funds, such as home equity loans, to pay
medical bills. If any of these accounts ever go to collection, they
will be treated by researchers as nonmedical debt. \4\ For all these
reasons, research that relies on collections data will predictably
underestimate total medical debt.
---------------------------------------------------------------------------
\3\ For several examples of such products, see Bankrate, ``Best
Credit Cards for Medical Expenses'', https://www.bankrate.com/finance/
credit-cards/should-you-have-a-medical-credit-card/.
\4\ For a discussion of how such these strategies affect the
amount of reported medical debt in the context of bankruptcy filings,
see Melissa B. Jacoby and Mirya R. Holman, ``Managing Medical Bills on
the Brink of Bankruptcy'', 10 Yale J. Health Pol'y L. Ethics 239
(2010).
---------------------------------------------------------------------------
An alternative approach relies on survey data. For example, Rae et
al. (2022) use data from the U.S. Census Survey of Income and Program
Participation (SIPP) to evaluate medical debt. \5\ They arrive at a
much higher figure ($195 billion) than the studies based on credit
reports. Surveys have their own issues involving validity, including
whether the sample size is sufficient, and whether respondents can
accurately recall and report information. For these reasons, Rae, et
al. (2022), note that ``[t]he total amount of medical debt is difficult
to estimate with any precision. While surveys capture a larger share of
people and more types of medical debt than analysis of credit reports,
there are challenges in capturing data from people who owe high levels
of debt.'' \6\ That said, like the studies based on credit reports,
Rae, et al. (2022), also find that medical debt is highly concentrated,
with large sums owed by a relatively modest number of individuals:
``0.3 percent of adults account for well more than half of the total
medical debt.'' \7\
---------------------------------------------------------------------------
\5\ Matthew Rae, et al., ``The Burden of Medical Debt in the
United States'', KFF Issue Brief, Mar. 10, 2022, https://
www.healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-
united-states/ ($195 billion). Other researchers have used similar
strategies. See, e.g., U.S. Census Bureau, ``Who Had Medical Debt in
the United States?'' (Apr. 7, 2021), https://www.census.gov/library/
stories/2021/04/who-had-medical-debt-in-united-states.html; Liz Hamel,
et al., ``The Burden of Medical Debt: Results From the Kaiser Family
Foundation/New York Times Medical Bills Survey'', (Jan. 5, 2016),
https://www.kff.org/health-costs/report/the-burden-of-medical-debt-
results-from-the-kaiser-family-foundation-new-york-times-medical-bills-
survey/; Robin A. Cohen and Jeannine S. Schiller, ``Problems Paying
Medical Bills Among Persons Under Age 65: Early Release of Estimates
From the National Health Interview Survey'', 2011-June 2015, National
Center for Health Statistics; (Dec. 2015), https://www.cdc.gov/nchs/
data/nhis/earlyrelease/probs-paying-medical-bills-jan-2011-jun-
2015.pdf; Sara R. Collins, et al., ``Losing Ground: How the Loss of
Adequate Health Insurance Is Burdening Working Families: Findings From
the Commonwealth Fund Biennial Health Insurance Surveys'', 2001-2007,
https://www.commonwealthfund.org/publications/fund-reports/2008/aug/
losing-ground-how-loss-adequate-health-insurance-burdening.
\6\ Rae, et al., supra note 5.
\7\ Id.
---------------------------------------------------------------------------
To sum up, researchers have used various strategies to quantify
medical debt, and have arrived at figures ranging from $81 billion to
195 billion. This range of figures is the result of different
methodological choices, data (un)availability, and definitional
uncertainty.
Medical Debt Is a Function of Multiple Interactive Factors
The amount of medical debt that is incurred is a function of the
billed cost of care, less any discounts and payments (including
insurance, charity care write-offs, and direct payment by the patient).
This formula means the amount of medical debt incurred by any given
patient is affected by multiple factors, including how much care they
receive; the list price of the care that is rendered; whether the
patient has insurance; whether the care is provided in-network or not;
the ``generosity'' of applicable insurance coverage (i.e., how large
the deductibles and copayments are); the ``generosity'' of provider
charity care policies and whether they pursue patients for balance
bills; and the amount of any payments made by the patient at the time
of service.
This list makes clear how many moving parts there are associated
with any given episode of medical debt, as well as the potential
interactions of each of those parts. For example, people who don't
consume health care won't have medical debt, even if they don't have
insurance--or have insurance with large copayments and deductibles.
People who do consume health care but have ``rich'' insurance coverage
(i.e., insurance with no copayments or deductibles) are unlikely to end
up with material medical debt. Patients who receive care from a retail
clinic are less likely to have material medical debt than those who
always go to a hospital emergency department. Patients who receive care
from in-network providers are less likely to end up with material
medical debt than those who receive care from out-of-network providers.
Patients who receive care from a hospital with a robust charity care
policy are less likely to have material medical debt than those who
receive care from a hospital that has a more restrictive charity care
policy. Patients who receive care from a provider that does not balance
bill are less likely to have material medical debt than those who
receive care from a provider that aggressively seeks to collect balance
bills. And so on.
Credit Reporting and Medical Debt
Until recently, credit reporting agencies reported medical debt
like any other form of debt. In the last week, Equifax, Experian, and
Transunion have all announced changes in how they will handle medical
debt. In general, these changes involve (i) deferring the reporting of
medical debt that is in collections until a year has passed (for debt
that exceeds $500); (ii) not reporting medical debt that is in
collections if the amount owed is less than $500; and (iii) removing
information on collection of medical debt from credit reports if the
debt has been paid off. \8\
---------------------------------------------------------------------------
\8\ Jessica Merrit, ``Most Medical Debt May Soon Vanish From
Credit Reports'', U.S. News Money, Mar. 25, 2022, https://
money.usnews.com/credit-cards/articles/most-medical-debt-may-soon-
vanish-from-credit-reports.
---------------------------------------------------------------------------
It remains to be seen how credit rating scores will be affected by
these changes, or by other possible changes to credit reporting
practices regarding medical debt. There are reasons to expect that
individuals with modest medical debt may experience an increase in
their credit rating, affecting their ability to obtain credit on
favorable terms. Depending on the details of credit scoring and
adjustments made in response to the elimination of most medical debt
from credit reports, the increase in credit rating may be temporary.
Alternatively, even if the credit rating bump is persistent, the
meaning of any given credit score to issuers may change as well.
There are likely to be other follow-on consequences as well. At the
margin, changes in credit reporting may make some patients less willing
to pay their medical bills. Nonhospital providers are likely to adapt
by restricting available appointments to those who can pay in full at
the time of service, or otherwise limiting access to care to patients
unable to pay in full at the time of service--the very group of
patients whom this change in credit reporting aims to help. \9\ I would
also expect more consolidation on the delivery side of the market, as
small groups and individual providers come under increasing financial
pressure. There will doubtless be other unintended consequences.
---------------------------------------------------------------------------
\9\ Hospitals that receive Medicare are subject to EMTALA, and may
not deny evaluation and treatment based on insurance status or ability
to pay.
---------------------------------------------------------------------------
Solving the Problem of Medical Debt
Medical debt is a symptom of a larger problem--the American health
care system is too expensive. Attempting to solve the problem of
medical debt with tweaks to the credit reporting system is the
equivalent of treating a symptom instead of the underlying disease.
Congress has already taken a big step to address the problem of
medical debt with the No Surprises Act, although disagreement about
implementation has already resulted in litigation. \10\ There is no
shortage of additional ideas on how to make health care less expensive,
although there is considerable disagreement on which ideas are worth
pursuing. One strategy that should not be controversial is ensuring
nonprofit hospitals are providing sufficient charity care to justify
the sizeable tax exemption they receive. \11\ Another strategy that
should not be controversial is to encourage the use of lower-cost
providers (including retail clinics and paraprofessionals) when the
requisite services are within their scope of expertise. There is also
considerable price variation among providers for a variety of shoppable
medical services--creating obvious opportunities for lowering health
care spending, as long as there is sufficient pricing transparency.
\12\ I have spelled out other ideas for making American health care
cheaper in my academic work and am happy to discuss those issues
further if there is interest and time. \13\
---------------------------------------------------------------------------
\10\ See Katie Keith, ``Court Sets Aside Key Parts of No Surprises
Act Rule'', Health Aff. Feb. 24, 2022, https://www.healthaffairs.org/
do/10.1377/forefront.20220224.298748/.
\11\ Ge Bai and David A. Hyman, ``Nonprofit Hospitals' Community
Benefits Should Square With Their Tax Exemptions. They Often Don't'',
StatNews (Feb. 17, 2022), https://www.statnews.com/2022/02/17/
nonprofit-hospitals-not-earning-tax-exemptions/; Ge Bai and David A.
Hyman, ``Tax Exemptions for Nonprofit Hospitals: It's Time Taxpayers
Get Their Money's Worth'', StatNews (Apr. 5, 2021), https://
www.statnews.com/2021/04/05/tax-exemptions-nonprofit-hospitals-bad-
deal-taxpayers/.
\12\ John Jiang, Martin A. Makary, and Ge Bai, ``Commercial
Negotiated Prices for CMS-Specified Shoppable Radiology Services in
U.S. Hospitals'', 302 Radiology (Nov. 30, 2021), https://doi.org/
10.1148/radiol.2021211948. See also Melanie Evans, ``Some Hospitals
Charge up to 10 Times More for Medical Scans Than Others, Study
Finds'', Wall St. J. Nov. 30, 2021, https://www.wsj.com/articles/some-
hospitals-charge-up-to-10-times-more-for-medical-scans-than-others-
study-finds-11638284400.
\13\ Charles Silver and David A. Hyman, ``Overcharged: Why
Americans Pay Too Much for Health Care'' (Cato, 2018).
---------------------------------------------------------------------------
______
PREPARED STATEMENT OF BERNETA L. HAYNES
Staff Attorney, National Consumer Law Center
March 29, 2022
Summary
Chairman Brown, Ranking Member Toomey, and Members of the
Committee, thank you for inviting me to testify today regarding
consumer medical debt. I offer my testimony here on behalf of the low-
income clients of the National Consumer Law Center. \1\
---------------------------------------------------------------------------
\1\ This testimony was written by Berneta L. Haynes, with
editorial review by Lauren Saunders, Carolyn Carter, April Kuehnhoff,
and Jenifer Bosco. For further discussion and policy solutions, see
Berneta Haynes, ``The Racial Health and Wealth Gap: Impact of Medical
Debt on Black Families'', National Consumer Law Center (March 2022),
available at https://www.nclc.org/images/pdf/medical-debt/RacialHealth-
Rpt-2022.pdf.
---------------------------------------------------------------------------
The National Consumer Law Center is a nonprofit organization
working for economic justice for low-income consumers and other
vulnerable populations. We work with thousands of legal services,
Government and private attorneys, as well as community groups and
nonprofit organizations, from all States who represent low-income and
older adults on consumer issues. As a result of our daily contact with
these advocates, we have seen many examples of the damage wrought by
medical debt. It is from this vantage point that we supply these
comments.
An alarming number of consumers struggle with medical bills in the
United States, with medical debt representing more than half of all
debts in collection. \2\ Black and Latino consumers, who are more
likely to be uninsured and underinsured, carry significant medical
debt. \3\ Among Black households, 27.9 percent carry medical debt,
compared to 17.2 percent of White non-Hispanic households. \4\
Households in the South, the region with the highest concentration of
Black people, carry more medical debt than households in the Midwest,
West, and Northeast. Racial inequality underlies these disparities in
medical debt.
---------------------------------------------------------------------------
\2\ ``Medical Debt Burden in the United States'', Consumer
Financial Protection Bureau (February 2022), available at https://
files.consumerfinance.gov/f/documents/cfpb-medical-debt-burden-in-the-
united-states-report-2022-03.pdf.
\3\ Andre M. Perry, Joia Crear-Perry, Carl Romer, and Nana
Adjeiwaa-Manu. ``The Racial Implications of Medical Debt: How Moving
Toward Universal Health Care and Other Reforms Can Address Them''.
Brookings Institution (Oct. 2021), available at https://
www.brookings.edu/research/the-racial-implications-of-medical-debt-how-
moving-toward-universal-health-care-and-other-reforms-can-address-them/
. See also Neil Bennett, Jonathan Eggleston, Laryssa Mykyta, and Briana
Sullivan, ``19 Percent of U.S. Households Could Not Afford To Pay for
Medical Care Right Away''. United States Census Bureau, 2021, available
at https://www.census.gov/library/stories/2021/04/who-had-medical-debt-
in-united-states.html.
\4\ Neil Bennett, Jonathan Eggleston, Laryssa Mykyta, and Briana
Sullivan. ``19 Percent of U.S. Households Could Not Afford To Pay for
Medical Care Right Away''. United States Census Bureau, 2021, available
at https://www.census.gov/library/stories/2021/04/who-had-medical-debt-
in-united-states.html. Households in the South, the region with the
highest concentration of Black people, also carry more debt than
households in the Midwest, West, and Northeast.
---------------------------------------------------------------------------
Recently, the Big Three credit bureaus (Equifax, Experian, and
TransUnion) announced changes to how they will report medical debt; the
changes will result in the removal of nearly 70 percent of medical
bills from credit reports. \5\ When medical bills go unpaid and end up
reported to credit bureaus, it harms consumer credit scores \6\ that
increasingly have become important for obtaining employment, housing,
and other financial products. As a result, medical debt can lead to
long-term financial insecurity. For this reason, more work is necessary
to remove all medical debts from credit reports.
---------------------------------------------------------------------------
\5\ On March 18, 2022, the Big Three credit bureaus (Equifax,
Experian, and TransUnion) announced changes to how they report medical
debt; the changes will result in the removal of nearly 70 percent of
medical bills from credit reports. See Anna Maria Andriotis, ``Most
Medical Debts To Be Removed From Consumers' Credit Reports'', Wall
Street Journal (March 18, 2022), available at https://www.wsj.com/
articles/most-medical-debts-to-be-removed-from-consumers-credit-
reports-11647604803?reflink=desktopwebshare-permalink.
\6\ Michael Best, Jenifer Bosco, and Chi Chi Wu. ``Don't Add
Insult to Injury: Medical Debt and Credit Reports'', NCLC (November
2019), available at https://www.nclc.org/images/pdf/debt-collection/
report-dont-add-insult-nov2019.pdf.
---------------------------------------------------------------------------
Because medical debt brings with it the threat of aggressive
collection practices, many individuals take risky measures to avoid
medical debt collection. Individuals often drain their short-term
savings, increase their credit card debt, \7\ or dip into long-term
savings accounts (retirement or college funds) to pay off burdensome
medical bills. \8\ Families sometimes turn to deceptive financial
products, such as medical credit cards \9\ and risky high-interest
small-dollar loans to pay medical bills. \10\ In a recent survey by the
American Cancer Society, 7 percent of respondents reported taking out a
loan to pay their medical debt. \11\ As such, medical debt can show up
as other types of debt in individual credit histories.
---------------------------------------------------------------------------
\7\ ``The median credit card balance from health expenditures
among African American middle class households that carry the expense
on their credit card is $933. The median indebted African American
household with medical debt on their credit cards carries 11 percent of
their total credit card debt due to medical expenses.'' See Catherine
Ruetschlin and Dedrick Asante-Muhammad. ``The Challenge of Credit Card
Debt for the African American Middle Class''. Demos and NAACP (Dec.
2013), available at http://www.demos.org/sites/default/files/
publications/CreditCardDebt-Demos-NAACP-0.pdf.
\8\ This is true for uninsured and insured individuals alike. See
Hamel, Liz, et al. ``The Burden of Medical Debt: Results From the
Kaiser Family Foundation/New York Times Medical Bills Survey''. Kaiser
Family Foundation (Jan. 2016), available at https://www.kff.org/report-
section/the-burden-of-medical-debt-section-1-who-has-medical-bill-
problems-and-what-are-the-contributing-factors/.
\9\ National Consumer Law Center, Collection Actions (5th ed.
2020), 9.4.4.1, updated at https://library.nclc.org/node/
2436706?s=care%20credit. In 2021, the Consumer Financial Protection
Bureau received complaints against medical credit card companies for a
variety of reasons, including overcharge of interest and lack of notice
of fees, conditions, or contract terms.
\10\ Hamel, Liz, et al. ``The Burden of Medical Debt: Results From
the Kaiser Family Foundation/New York Times Medical Bills Survey''.
Kaiser Family Foundation (Jan. 2016), available at https://www.kff.org/
report-section/the-burden-of-medical-debt-section-1-who-has-medical-
bill-problems-and-what-are-the-contributing-factors/.
\11\ Four percent of respondents indicated they took out a payday
loan or refinanced their home to pay medical bills. See ``Survivor
Views: Cancer and Medical Debt'', American Cancer Society (Feb. 2022),
available at https://www.fightcancer.org/sites/default/files/national-
documents/survivor-views-cancer-debt-0.pdf.
---------------------------------------------------------------------------
Hospitals and other medical providers frequently place accounts
with third-party collectors, who may use frequent calls and other
communications to pressure consumers to pay. Black people in particular
are more likely to be contacted by debt collectors over medical debt.
In fact, debt collectors contact Black households at twice the rate of
White households, according to the Urban Institute. \12\ The Federal
Trade Commission found that areas where the Black population is 50
percent or more have a higher rate of debt collection complaints
compared to areas that are majority nonblack. \13\ Despite the credit
and collection protections under the Affordable Care Act (ACA), the
Fair Debt Collection Practices Act (FDCPA), and various State-based
protections, aggressive debt collection remains a looming problem, and
medical debt is one of the leading triggers of experiences with debt
collectors.
---------------------------------------------------------------------------
\12\ Michael Karpman, et al. ``The Well Being and Basic Needs
Survey: A New Data Source for Monitoring the Health and Well-Being of
Individuals and Families'', Urban Institute (Aug. 28, 2018), available
at https://www.urban.org/sites/default/files/publication/98919/the-
well-being-and-basic-needs-survey-1.pdf. See also National Consumer Law
Center, Fair Debt Collection (10th ed. 2022), 1.3.1.5, updated at
https://library.nclc.org/fdc/01030105-0.
\13\ Despite similar rates of default and late payments, 71
percent of Black middle-income households received calls from debt
collectors compared to 50 percent of White middle-income households.
See Catherine Ruetschlin and Dedrick Asante-Muhammad. ``The Challenge
of Credit Card Debt for the African American Middle Class''. Demos and
NAACP (Dec. 2013), available at http://www.demos.org/sites/default/
files/publications/CreditCardDebt-Demos-NAACP-0.pdf. See also Raval
Devesh. ``Which Communities Complain to Policymakers? Evidence From
Consumer Sentinel''. Federal Trade Commission (July 2018), 20,
available at https://www.ftc.gov/system/files/documents/reports/which-
communities-complain-policymakers-evidence-consumer-sentinel/working-
paper-336.pdf.
---------------------------------------------------------------------------
In some cases, medical providers file collection lawsuits on
alleged medical debts. Once they obtain a judgment, providers may be
able to use a variety of collection tools (depending on State law),
including: seeking liens on homes, wage garnishment, tax refund
garnishment, attachment and seizure of bank accounts, and even going so
far as to seek civil arrest warrants when debtors fail to show up for
court proceedings. For example, a recent investigation by Kaiser Health
News revealed that the University of Virginia Hospital system has a
history of relying on property liens to collect unpaid medical bills.
\14\ As a result of the investigation, the system announced in 2021
that it would cancel decades of liens placed on low-income patients for
unpaid medical bills. \15\ Between 2009 and 2018, hospitals in Maryland
filled nearly 40,000 lawsuits that resulted in wage garnishment, often
from their own employees. \16\ Furthermore, the ACLU documented cases
of arrests for medical debts in several States, including Maryland,
Arkansas, and Tennessee. \17\
---------------------------------------------------------------------------
\14\ Jay Hancock. ``UVA Health Still Squeezing Money From
Patients--By Seizing Their Home Equity'', Kaiser Health News (Oct. 19,
2020), available at https://khn.org/news/uva-health-property-liens-
patient-medical-debt/.
\15\ Jay Hancock. ``UVA Health Will Wipe Out Tens of Thousands of
Lawsuits Against Patients'', Kaiser Health News (April 20, 2021),
available at https://khn.org/news/article/uva-health-will-wipe-out-
tens-of-thousands-of-lawsuits-against-patients/.
\16\ ``Preying on Patients: Maryland's Not-for-Profit Hospitals
and Medical Debt Lawsuits''. National Nurses United (Feb. 2020), 9, 17,
available at https://www.nationalnursesunited.org/preying-on-patients.
\17\ ``A Pound of Flesh: The Criminalization of Private Debt''.
American Civil Liberties Union (2018), 45, available at https://
www.aclu.org/sites/default/files/field_document/022118-debtreport.pdf.
---------------------------------------------------------------------------
Recommendations
To address the epidemic of medical debt, policy advocates and
lawmakers should focus on ways to prevent medical debt at the outset,
not after the fact, to protect consumers from harmful debt collection
practices and long-term impacts on their
financial wellbeing. Policymakers also should provide consumer
protections that address the racial disparities in medical debt. The
following solutions would go a long way toward addressing the medical
debt crisis:
Strengthen Protections Against Aggressive Debt Collection.
Prohibit aggressive debt collection by banning wage
garnishment, bank account seizure, property liens, foreclosure
of homes based on medical debt liens, and civil arrest warrants
(also referred to as body attachments or capias warrants) for
medical debt.
Prohibit Collection of Medical Debt During Health Insurance
Appeals. Require debt collectors to cease collection of alleged
medical debts when they are advised that a health insurance
appeal is pending or otherwise informed that the consumer is
seeking to resolve the account with the insurer.
Crack Down on Third-Party Debt Collection. End the practice
of turning over medical debt to third-party collection
agencies.
Protect Patient Credit Reports. Prohibit providers and debt
collectors from reporting all medical debt to credit reporting
bureaus. \18\ Short of total prohibition, exclude disputed debt
and require screening for financial assistance.
---------------------------------------------------------------------------
\18\ To date, Minnesota is the only State that prohibits hospitals
and debt collectors from reporting medical debts to credit bureaus. For
a discussion, see Michael Best, Jenifer Bosco, and Chi Chi Wu. ``Don't
Add Insult to Injury: Medical Debt and Credit Reports''. National
Consumer Law Center (Nov. 2019), available at https://www.nclc.org/
images/pdf/debt-collection/report-dont-add-insult-nov2019.pdf.
Improve Protection of Funds Needed for Necessities for All
Types of Debt. As medical debt is often converted into credit
card and other types of debt, we sorely need to increase the
Federal protection against wage garnishment and to adopt a new
Federal protection for a base amount of funds in bank accounts.
\19\ Currently, under Federal law, only $217.50/week in wages
are fully protected--not even the poverty level, and there is
no general Federal protection for bank accounts; in many
States, collectors can completely empty out bank accounts. \20\
---------------------------------------------------------------------------
\19\ See NCLC, ``A Free Stimulus To Support Struggling Families
and the Economy: First Suspend, Then Reform, Wage and Bank Account
Garnishment'' (Jan. 2021), http://bit.ly/Wage-Garnish-Stimulus-2021;
Center for Responsible Lending, ``Protect Against Abusive Debt
Collection: Working Families Need Wage Protection and a Chance to
Save'' (Feb. 2021), https://www.responsiblelending.org/sites/default/
files/nodes/files/research-publication/crl-garnishment-memo-
feb2021.pdf.
\20\ See NCLC, ``No Fresh Start in 2021: Will States Let Debt
Collectors Push Families Into Poverty as Pandemic Protections Expire?''
(Nov. 2021), https://www.nclc.org/issues/report-still-no-fresh-
start.html.
Please see the attached reports and materials for more policy
recommendations to protect people from burdensome medical debt: The
Racial Health and Wealth Gap: Impact of Medical Debt on Black Families
\21\ and NCLC's recent letter to the CFPB regarding medical debt.
---------------------------------------------------------------------------
\21\ Berneta Haynes, ``The Racial Health and Wealth Gap: Impact of
Medical Debt on Black Families'', National Consumer Law Center (March
2022), available at https://www.nclc.org/images/pdf/medical-debt/
RacialHealth-Rpt-2022.pdf. See also Chi Chi Wu, Jenifer Bosco, and
April Kuehnhoff. ``Model Medical Debt Protection Act'', National
Consumer Law Center (September 2019), available at https://
www.nclc.org/images/pdf/medical-debt/model-medical-debt-protection-act-
082017.pdf.
---------------------------------------------------------------------------
Conclusion
Issues related to medical debt cut across a variety of areas of
financial regulation (credit reporting, debt collection, and regulation
of lending products, etc.), and thus the solutions must be broad and
cross-cutting. Urgent policy solutions are needed to reduce consumer
medical debt and ensure that health care never throws anyone into a
cycle of financial insecurity.
Thank you for the opportunity to testify today. I would be happy to
answer your questions.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
RESPONSES TO WRITTEN QUESTIONS
OF SENATOR MENENDEZ FROM BERNETA L. HAYNES
Q.1. Removing cleared medical debt from consumer credit reports
is a good first step, but as the sheer amount of medical debt
indicates, it isn't so easy for families to clear up their
medical debt.
What are some of the challenges people face in trying to
clear their medical debt?
A.1. As discussed in my written testimony, \1\ consumers trying
to clear their medical debt face significant challenges,
including lack of disposable income or savings to pay the
debts, obstacles accessing charity care, and harassment and
aggressive behavior from debt collectors.
---------------------------------------------------------------------------
\1\ Testimony of Berneta L. Haynes on ``Economic Impact of the
Growing Burden of Medical Debt'' before the United States Senate
Committee on Banking, Housing, and Urban Affairs, Mar. 29, 2022,
available at https://www.banking.senate.gov/imo/media/doc/Haynes%20
Testimony%203-29-22.pdf.
---------------------------------------------------------------------------
As the Consumer Financial Protection Bureau (CFPB) has
indicated, medical debt disproportionately impacts lower-income
consumers, \2\ individuals who are less likely to have
emergency savings or disposable income to weather a medical
bill. The Kaiser Family Foundation reported that consumers with
medical bills are less likely than those without medical bills
to have a checking or savings account, a retirement account of
any kind, or any type of investments or stocks. \3\
Furthermore, these consumers often reported loss of income due
to illness. \4\ In an effort to clear their medical bills,
these consumers may turn to deceptive and risky financial
alternatives (credit cards, high-interest small-dollar loans,
medical credit cards, \5\ etc.), taking an already precarious
financial situation from bad to worse. \6\
---------------------------------------------------------------------------
\2\ ``Medical Debt Burden in the United States'', Consumer
Financial Protection Bureau (February 2022), p. 15, available at
https://files.consumerfinance.gov/f/documents/cfpb-medical-debt-burden-
in-the-united-states-report-2022-03.pdf.
\3\ Hamel, Liz, et al. ``The Burden of Medical Debt: Results From
the Kaiser Family Foundation/New York Times Medical Bills Survey''.
Kaiser Family Foundation (Jan. 2016), available at https://www.kff.org/
report-section/the-burden-of-medical-debt-section-1-who-has-medical-
bill-problems-and-what-are-the-contributing-factors/.
\4\ Id.
\5\ National Consumer Law Center, Collection Actions (5th ed.
2020), 9.4.4.1, updated at https://library.nclc.org/node/
2436706?s=care%20credit.
\6\ This is true for uninsured and insured individuals alike. See
Hamel, Liz, et al. ``The Burden of Medical Debt: Results From the
Kaiser Family Foundation/New York Times Medical Bills Survey''. Kaiser
Family Foundation (Jan. 2016), available at https://www.kff.org/report-
section/the-burden-of-medical-debt-section-1-who-has-medical-bill-
problems-and-what-are-the-contributing-factors/.
---------------------------------------------------------------------------
Ideally, charity care or FAPs should help protect some
uninsured or underinsured patients from burdensome medical
debt. In practice, however, these programs fall short as many
hospitals do the bare minimum to satisfy the Affordable Care
Act's (ACA) requirements for their tax-exempt status. Charity
care policies fall short for several reasons:
Hospitals fail to inform patients of their
eligibility for charity care before commencing debt
collection; \7\
---------------------------------------------------------------------------
\7\ Jordan Rau. ``Patients Eligible for Charity Care Instead Get
Big Bills''. Kaiser Health News (Oct. 14, 2019), available at https://
khn.org/news/patients-eligible-for-charity-care-instead-get-big-bills/.
Lack of specific guidelines and minimum eligibility
criteria in the ACA's FAP requirements; \8\
---------------------------------------------------------------------------
\8\ 26 CFR 1.501(r)-4. See also Jordan Rau. ``Patients Eligible
for Charity Care Instead Get Big Bills''. Kaiser Health News (Oct. 14,
2019), available at https://khn.org/news/patients-eligible-for-charity-
care-instead-get-big-bills/.
Gaps in hospital FAPs, which exclude many
---------------------------------------------------------------------------
providers; and
Overall lack of effective implementation,
enforcement, and oversight of charity care programs.
Patients struggle to access charity either due to lack of
information, narrow eligibility guidelines, and onerous
application or documentation requirements. Lack of enforcement
and oversight, lack of notice to patients, and lack of specific
Federal guidelines and minimum eligibility requirements for
hospital charity care programs all snowball to limit the
effectiveness of the ACA's efforts to reduce the medical debt
burden and help people clear their medical bills.
As the debt lingers, patients face aggressive debt
collectors, \9\ which can lead to wage garnishment, seizure of
bank accounts, and even liens against property. Medical debt is
consistently the most common type of past-due bill about which
consumers reported being contacted by debt collectors. \10\ To
avoid aggressive debt collection, individuals lucky enough to
have any short-term or long-term savings accounts often drain
their savings to pay off burdensome medical bills. \11\ As
noted, families sometimes turn to deceptive financial products
that can worsen their financial situation. \12\ In effect, the
risky measures families often take to clear a medical debt and
avoid debt collection further trap them in a cycle of financial
insecurity.
---------------------------------------------------------------------------
\9\ In 2022, the Consumer Financial Protection Bureau reported
that 58 percent of bills in collections and on people's credit records
were medical bills in the second quarter of 2021. ``Medical Debt Burden
in the United States'', Consumer Financial Protection Bureau (February
2022), available at https://files.consumerfinance.gov/f/documents/
cfpb_medical-debt-burden-in-the-united-states_report_2022-03.pdf. See
also ``Consumer Experiences with Debt Collection: Findings from the
CFPB's Survey of Consumer Views on Debt''. Consumer Financial
Protection Bureau (Jan. 2017), 5, 21, available at https://
files.consumerfinance.gov/f/documents/201701_cfpb_Debt-Collection-
Survey-Report.pdf (finding Medical debt, credit card debt, and student
debt led the list of types of debt that led to interaction with debt
collectors).
\10\ ``Consumer Experiences With Debt Collection: Findings From
the CFPB's Consumer Survey of Consumer Views on Debt'', Consumer
Financial Protection Bureau (January 2017), p. 5, available at
201701_cfpb_Debt-Collection-Survey-Report.pdf.
\11\ Hamel, Liz, et al. ``The Burden of Medical Debt: Results From
the Kaiser Family Foundation/New York Times Medical Bills Survey''.
Kaiser Family Foundation (Jan. 2016), available at https://www.kff.org/
report-section/the-burden-of-medical-debt-section-1-who-has-medical-
bill-problems-and-what-are-the-contributing-factors/.
\12\ Hamel, Liz, et al. ``The Burden of Medical Debt: Results From
the Kaiser Family Foundation/New York Times Medical Bills Survey''.
Kaiser Family Foundation (Jan. 2016), available at https://www.kff.org/
report-section/the-burden-of-medical-debt-section-1-who-has-medical-
bill-problems-and-what-are-the-contributing-factors/.
Q.2. One in four Millennials and Gen-Z members with medical
debt skipped rent or mortgage payments because of their debt.
Those missed payments can negatively affect their credit score
for years.
What are some other ways that medical debt can have a
lasting effect on credit scores? What can be done to mitigate
or expunge these secondary effects?
A.2. As discussed above, to manage their medical debt, patients
often put medical bills on credit cards, take out risky high-
interest loans, and turn to medical credit cards, all of which
can harm their credit scores and increase the likelihood of
bankruptcy. According to the CFPB, patients can sometimes see
significant drops in their credit scores due to small unpaid
medical debts. \13\ One consumer reported to the CFPB that she
saw her credit score drop 94 points due to an unpaid medical
debt of about $120. \14\ Worse yet, consumers reported only
finding out a medical debt had affected their credit report
when they were in the process of making a major purchase. For
example, one consumer stated that when she was trying to buy a
house she found out about a medical debt that had harmed her
score. \15\ To address this issue, the CFPB issued Regulation F
in 2020 (effective November 30, 2021), requiring debt
collectors to notify consumers before reporting the debt to a
credit reporting agency. Moreover, even after a consumer has
paid to have a medical debt removed from their credit report,
it may continue to harm their credit score; some changes
recently announced by the major credit bureaus include removing
paid medical debts from credit reports. \16\
---------------------------------------------------------------------------
\13\ Consumer Financial Protection Bureau. ``Complaint Bulletin:
Medical Billing and Collection Issues in Consumer Complaints'', April
2022, p. 18, available at https://files.
consumerfinance.gov/f/documents/cfpb_complaint-bulletin-medical-
billing_report_2022-04.pdf.
\14\ Consumer Financial Protection Bureau. ``Complaint Bulletin:
Medical Billing and Collection Issues in Consumer Complaints'', April
2022, p. 18, available at https://files.consumerfinance.gov/f/
documents/cfpb_complaint-bulletin-medical-billing_report_2022-04.pdf.
\15\ Consumer Financial Protection Bureau. ``Complaint Bulletin:
Medical Billing and Collection Issues in Consumer Complaints'', April
2022, p. 22, available at https://files.consumerfinance.gov/f/
documents/cfpb_complaint-bulletin-medical-billing_report_2022-04.pdf.
\16\ See Consumer Financial Protection Bureau. ``Complaint
Bulletin: Medical Billing and Collection Issues in Consumer
Complaints'', April 2022, p. 23, available at https://
files.consumerfinance.gov/f/documents/cfpb_complaint-bulletin-medical-
billing_report_2022-04.pdf, citing a consumer who paid to have a
medical debt removed, but it was never removed and the debt continued
affecting their credit score, preventing them from obtaining a
mortgage.
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Consumers may file bankruptcy due to medical debt. In a
recent survey of bankruptcy filers between 2013 and 2016, most
respondents indicated medical debt as a reason for their
bankruptcy. \17\ Bankruptcy may impact credit scores for up to
10 years, as limited by the Fair Credit Reporting Act. \18\
This is particularly troubling because credit scores
increasingly have become important for obtaining employment,
housing, and other financial products. \19\
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\17\ Himmelstein, et al. ``Medical Bankruptcy: Still Common
Despite the Affordable Care Act'', American Journal of Public Health
(March 2019), available at https://ajph.apha
publications.org/doi/abs/10.2105/AJPH.2018.304901.
\18\ ``Medical Debt Burden in the United States'', Consumer
Financial Protection Bureau (February 2022), p. 28-29, available at
https://files.consumerfinance.gov/f/documents/cfpb-medical-debt-burden-
in-the-united-states_report_2022-03.pdf.
\19\ Michael Best, Jenifer Bosco, and Chi Chi Wu. ``Don't Add
Insult to Injury: Medical Debt and Credit Reports'', NCLC (November
2019), available at https://www.nclc.org/images/pdf/debt_collection/
report-dont-add-insult-nov2019.pdf.
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Recently, the Big Three credit bureaus (Equifax, Experian,
and TransUnion) announced changes to how they will report
medical debt. \20\ The credit bureaus announced that, beginning
in July, they will remove medical debt that has been paid off.
After March 2023, they will remove unpaid medical debt less
than $500. Going forward, they will wait a full year before
adding new unpaid medical debts to credit reports. These
changes will remove nearly 70 percent of medical debt from
credit reports, helping many of the 15 percent \21\ of
Americans with medical debt on their credit report and
mitigating some of the harm to credit scores. But the remaining
30 percent of medical debt on credit reports will continue to
harm the most vulnerable consumers, such as those facing
catastrophic illness who cannot afford to pay. It will
disproportionately impact consumers of color. Data from the
Urban Institute shows that the median medical debt Americans
have in collections is $797, and $854 among non-White
communities. \22\ Individuals with more than $500 in medical
debt, many of them non-White, will still see medical debt on
their credit reports. More needs to be done to protect the
consumers, disproportionately non-White, who will not be
covered by these changes.
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\20\ ``Consumer Advocates Cheer Removal of Most Medical Debt From
Credit Reports'', National Consumer Law Center (March 18, 2022),
available at https://www.nclc.org/media-center/consumer-advocates-
cheer-removal-of-most-medical-debt-from-credit-reports.html.
\21\ ``Debt in America: An Interactive Map''. Urban Institute
(Dec. 2020), available at https://apps.urban.org/features/debt-
interactive-map/?type=medical&variable=perc_debt_med.
\22\ Id.
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For this reason, Congress needs to act to protect patient
credit scores from medical debt. Specifically, Congress should
ban providers and debt collectors from reporting medical debt
for medically necessary services to credit reporting bureaus.
At a minimum, Congress or the States should codify the reforms
by the three major credit bureaus to limit providers and debt
collectors from reporting medical debts to credit bureaus until
one year has passed after the initial billing. The CFPB and FTC
should strengthen Regulation F, including investigating
compliance with Regulation F notice requirements, to ensure
that consumers receive notices from debt collectors before
credit reporting.
Q.3. A study from Johns Hopkins found that 26 of the 100
hospitals with the highest revenue, many of which are nonprofit
or Government run, filed nearly 39,000 court actions against
patients from 2018 to 2020. These actions include lawsuits,
wage garnishments, and personal property liens.
What can be done to combat the use of abusive debt
collection practices by hospitals?
A.3. Although the ACA and FDCPA provide important protections
against debt collection, aggressive debt collection practices
remain a problem, especially for consumers with medical debt.
Consumers struggling with unpaid medical bills face a range of
troubling debt collection practices that affect everything from
their finances to their housing and physical freedom.
To collect unpaid medical debts, hospitals and other
medical providers often place accounts with third-party
collectors who may use frequent calls and other communications
to pressure consumers to pay. These aggressive debt collection
practices disproportionately affect communities of color and
Black people, who are more likely than Whites to have medical
debt in collections \23\ and experience contact with debt
collectors. \24\ Additionally, some medical providers file
collection lawsuits on alleged medical debts. Once they obtain
a judgment, providers may be able to use a variety of
collection tools (depending on State law), including seeking
liens on homes, wage garnishment, tax refund garnishment,
attachment and seizure of bank accounts, and even going so far
as to seek civil arrest warrants when debtors fail to show up
for court proceedings. Here is a quick glance at the problem:
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\23\ Signe-Mary McKernan, Steven Brown, and Genevieve M. Kenney.
``Past-Due Medical Debt a Problem, Especially for Black Americans''.
Urban Institute, 2017, available at www.urban.org/urban-wire/past-due-
medical-debt-problem-especially-black-americans. See also ``Debt in
America: An Interactive Map''. Urban Institute (Dec. 2020), available
at https://apps.urban.org/features/debt-interactive-map/
?type=medical&variable=perc_debt_med.
\24\ Michael Karpman, et al. ``The Well Being and Basic Needs
Survey: A New Data Source for Monitoring the Health and Well-Being of
Individuals and Families'', Urban Institute (Aug. 28, 2018), available
at https://www.urban.org/sites/default/files/publication/98919/
the_well-being_and_basic_needs_survey_1.pdf.
Nonprofit hospitals, \25\ the very hospitals
subject to the ACA's restrictions against
``extraordinary collection actions,'' filed the most
lawsuits against patients between 2018 and 2020. \26\
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\25\ ``Hospitals by Ownership Type''. Kaiser Family Foundation,
available at https://www.kff.org/bf5afc7/.
\26\ Michelle McGhee and Will Chase. ``How America's Top Hospitals
Hound Patients With Predatory Billing''. Axios, Johns Hopkins
University, available at https://www.axios.com/hospital-billing.
Even at the onset of the COVID-19 pandemic when
States declared public health emergencies, some
hospitals continued suing patients for unpaid medical
bills, going as far as seeking liens against patients'
homes. \27\ In New York, nonprofit hospitals secured
4,880 liens in 2017 and 2018 on homes of patients who
had unpaid medical bills. \28\
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\27\ Froedtert Health System in Milwaukee filed more than 100
lawsuits from mid-March through July, after the Governor declared a
public health emergency on March 12, 2020. See Jenny Deam. ``Some
Hospitals Kept Suing Patients Over Medical Debt Through the Pandemic''.
ProPublica (June 14, 2021), available at https://www.propublica.org/
article/some-hospitals-kept-suing-patients-over-medical-debt-through-
the-pandemic.
\28\ Elisabeth R. Benjamin and Amanda Dunker. ``Discharged Into
Debt: Nonprofit Hospitals File Liens on Patients' Homes'', Community
Service Society (November 2021), available at https://www.cssny.org/
publications/entry/discharged-into-debt-nonprofit-hospitals-file-liens-
on-patients-homes.
Between 2009 and 2018, hospitals in Maryland filed
nearly 40,000 lawsuits that resulted in wage
garnishment, often from their own employees. \29\
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\29\ ``Preying on Patients: Maryland's Not-for-Profit Hospitals
and Medical Debt Lawsuits''. National Nurses United (Feb. 2020), 9, 17,
available at https://www.nationalnursesunited.org/preying-on-patients.
The ACLU documented cases of arrests for medical
debts in several States, including Maryland, Arkansas,
and Tennessee. \30\ In Maryland, they observed a
practice of patients being jailed for medical debts of
less than $1,000. \31\
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\30\ ``A Pound of Flesh: The Criminalization of Private Debt''.
American Civil Liberties Union (2018), 45, available at https://
www.aclu.org/sites/default/files/field_document/022118-debtreport.pdf.
\31\ ``A Pound of Flesh: The Criminalization of Private Debt''.
American Civil Liberties Union (2018), 45, available at https://
www.aclu.org/sites/default/files/field_document/022118-debtreport.pdf
(``including cases in which people were arrested in cases involving
debts of $217.50 and $230 owed to an addiction service provider'').
Some States have taken steps during the past few years to
address aggressive medical debt billing practices. In 2021,
Maryland passed the Medical Debt Protection Act, which
prohibits hospitals from requesting arrest warrants against
patients and from requesting a lien against a patient's home;
the Act also protects patients eligible for financial
assistance against wage garnishment and adverse credit
reporting. \32\ Similarly, Nevada's Medical Debt Protection Act
that passed in 2021 prohibits a collection agency from taking
civil actions for medical debts of less than $10,000 or
charging fees of more than 5 percent of the debt, and requires
60-day notification to the patient before a collection agency
can take debt collection actions. \33\ These laws, as well as
similar legislation passed in New Mexico \34\ and California
\35\ in 2021, are great starting points and illustrate what
legislators can do to solve the problem of aggressive medical
debt collection. At the Federal level, Congress should:
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\32\ See Senate Bill 514, available at http://mgaleg.maryland.gov/
2021RS/bills/sb/sb0514T.pdf. See also House Bill 565, available at
http://mgaleg.maryland.gov/2021RS/fnotes/bil_0005/hb0565.pdf.
\33\ See Senate Bill 248, available at https://
www.leg.state.nv.us/App/NELIS/REL/81st2021/Bill/7770/Text. The
collector can still sue in small claims court, limiting the value of
this provision.
\34\ The protections are enforced by the State attorney general
and patients may file a complaint against a health care facility,
third-party provider, or medical creditor that violates a provision of
the law. See Senate Bill 71, available at https://www.nmlegis.gov/
Legislation/Legislation?Chamber=S&LegType=B&LegNo=71&year=21. See also
``New Mexico Patients' Debt Collection Practices Act Signed by
Governor''. ACA International (Apr. 7, 2021), available at https://
www.acainternational.org/news/new-mexico-patients-debt-collection-
practices-act-signed-by-governor/.
\35\ See AB 1020, available at https://leginfo.legislature.ca.gov/
faces/billStatusClient.xhtml?
bill_id=202120220AB1020.
Strengthen Protections Against Aggressive Debt
Collection. Prohibit aggressive debt collection (or
``extraordinary collection actions'') by banning wage
garnishment, bank account seizure, property liens,
foreclosure of homes based on medical debt liens, and
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civil arrest warrants for medical debt.
Protect Patient Credit Reports. Pass H.R. 2537 \36\
and H.R. 2547, \37\ prohibiting providers and debt
collectors from reporting medical debts for medically
necessary procedures to credit reporting bureaus. At a
minimum, Congress should pass companion bills H.R. 773
\38\ and S. 214, \39\ which would codify the reforms
announced by the three major credit bureaus.
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\36\ See H.R. 2537 (Rep. Tlaib), Consumer Protection for Medical
Debt Collections Act, available at https://www.congress.gov/bill/117th-
congress/house-bill/2537.
\37\ See H.R. 2547 (Rep. Waters), Comprehensive Debt Collection
Improvement, available at https://www.congress.gov/bill/117th-congress/
house-bill/2547.
\38\ See H.R. 733 (Rep. Porter), Medical Debt Relief Act of 2021,
available at https://www.congress.gov/bill/117thcongress/house-bill/
773.
\39\ See S. 214 (Sen. Merkley), Medical Debt Relief Act of 2021,
available at https://www.congress.gov/bill/117thcongress/senate-bill/
214. See also S. 355 (Sen. Van Hollen), COVID-19 Medical Debt
Collection Relief Act of 2021, available at https://www.congress.gov/
bill/117th-congress/senate-bill/355.
Cancel Medical Debt and Pass Single-Payer Universal
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Health Care.
Discharge medical debt incurred through care at
facilities operated by the Federal Government,
including U.S. Department of Veterans Affairs hospitals
and clinics, as well as hospitals run by the Department
of Defense and the Department of Health and Human
Services. For privately held medical debt (debt
incurred for care at nonprofit and for-profit
facilities), the Federal Government should purchase
medical debt from debt collectors and health care
providers at discounted rates (avoiding a financial
windfall for debt collectors) and discharge these
debts.
Enact a universal publicly funded national
single-payer health plan administered at the State and
local levels, with comprehensive lifetime benefits,
including dental, vision, mental health care, substance
use disorder treatment, prescription drug coverage, and
hospice and long-term care. \40\ For additional
guidance, see NCLC's ``Don't Add Insult to Injury:
Medical Debt and Credit Reports'', \41\ which provides
an overview of the crisis of medical debt and potential
reforms to protect consumer credit reports. NCLC's
``Model Medical Protection Act'' \42\ also offers
language policymakers can use to build on existing
State policies and guide the development of new
policies to protect consumers from medical debt.
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\40\ For an overview of single-payer systems and why this type of
public system can address racial disparities in medical debt, see Andre
M. Perry, Joia Crear-Perry, Carl Romer, and Nana Adjeiwaa-Manu, ``The
Racial Implications of Medical Debt: How Moving Toward Universal Health
Care and Other Reforms Can Address Them'', Brookings Institution (Oct.
2021), available at https://www.brookings.edu/research/the-racial-
implications-of-medical-debt-how-moving-toward-universal-health-care-
and-other-reforms-can-address-them/.
\41\ Available at https://www.nclc.org/images/pdf/medical-debt/
Rpt_Ounce_of_Prevention
.pdf.
\42\ Available at https://www.nclc.org/images/pdf/medical-debt/
model-medical-debt-protection-act-082017.pdf.
Additional Material Supplied for the Record
STATEMENT SUBMITTED BY MINDY HEDGES
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
STATEMENT SUBMITTED BY PENELOPE WINGARD
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STATEMENT SUBMITTED BY SLOANE WESLOH
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
[all]