Posted March 29, 20223:00 pm
By Sabrina Eaton, cleveland.com
WASHINGTON, D. C. -- When Cleveland’s Robyn King brought her mother with Alzheimer’s to a nursing home, the part-time Learning Center worker made sure she checked the admission form box that said she did not agree to be personally liable for bills not covered by her mother’s Medicaid and Social Security checks.
That didn’t stop the facility from personally suing King for close to $80,000 two days before her mother passed away on October 3, 2020.
“I never had time to grieve,” King told a Tuesday Senate Banking, Housing and Urban Affairs Committee hearing on the economic burden of medical debt. “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?”
The Legal Aid Society of Cleveland helped King stop the lawsuit, but the nursing home is still seeking payment from her mother’s estate. King told the committee chaired by U.S. Sen. Sherrod Brown, an Ohio Democrat, that there’s “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,” King continued. “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 ... There must be a better way to take care of each other and not leave people like me facing life-changing amounts of debt.”
Brown on Monday sent a letter to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra to highlight consumer medical debt problems and urge the CFPB to address the issue by establishing an ombudsman position for consumer medical debt that would facilitate consumer complaint resolution and compliance with federal directives, like new law designed to stop some types of surprise medical bills.
“Accessing medical care is a necessity that has resulted in too many Americans facing overwhelming bills, harassment from debt collectors, and the long-term effects of negative credit actions,” said the letter Brown signed with Democrats Elizabeth Warren of Massachusetts, Tina Smith of Minnesota, Jack Reed of Rhode Island and Raphael Warnock of Georgia.
At Tuesday’s hearing, Brown said an estimated 43 million Americans have $88 billion of medical debt on their credit reports, and the problem is growing. He said low-income families, Black and Hispanic households, veterans, young adults, and older Americans are hit particularly hard, with harassment by debt collectors who get a cut of anything they collect worsening “this already exhausting experience.”
In addition to recommending that the CFPB address medical debt, Brown said it would help if the 12 states that refused to expand Medicaid under the Affordable Care Act would do so and if private institutions met their financial assistance obligations and complied with laws that ban surprise medical bills. Brown praised an announcement earlier this month that the nation’s largest credit reporting companies, Equifax, Experian and TransUnion, would remove most medical debts from credit reports after the CFPB announced it would hold them accountable for inaccurate reports.
“No one should have their financial future ruined because they get sick,” said Brown.
The committee’s top Republican, Sen. Patrick Toomey of Pennsylvania, urged the government not to suppress accurate credit information such as medical debts. He said two-thirds of medical debt collections are under $500, and bankruptcy from medical debt is extremely rare.
“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,” said Toomey. “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 healthcare 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.”
Toomey noted that average medical debts fell by 40% over the last decade even though medical spending increased by 70%. He attributed some of the debt declines to an improved economy that helped low-wage workers make significant gains in income, the expansion of Medicaid, and the Affordable Care Act’s enactment.
“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 healthcare outcomes, but unsurprisingly, if you’re willing to spend massive amounts of other people’s money, you can transfer individual’s debts onto the taxpayer,” said Toomey.
Berneta L. Haynes of the National Consumer Law Center told the committee that medical debt represents more than half of all debts in collection and said Black and Latinè consumers, who are more likely to be uninsured and underinsured, carry significant medical debt. Among Black households, she said 27.9% carry medical debt, compared to 17.2% of white non-Hispanic households.
Emily Stewart of Community Catalyst, a non-profit national healthcare advocacy organization, said the largest share of medical debts comes from emergency room visits, dental care and diagnostic tests like X-rays and MRIs.
She said that whether a person’s medical bill problems are alleviated or aggravated hinges on who owns the debt. Many hospitals offer extended payment plans directly to patients, and non-profit hospitals must offer financial assistance, but some hospitals don’t publicize those programs to patients. She said an analysis by CFPB showed that two-thirds of medical debt collection complaints assert the debt was never owed, never verified, was already paid, or was discharged in bankruptcy.
“The reason why we have medical debt is because healthcare in the United States is expensive,” added Georgetown University law school professor David Hyman. “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 healthcare less expensive.”
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Original story can be found at cleveland.com: Cleveland woman testifies at U.S. Senate hearing on tackling medical debt