WASHINGTON—Today, U.S. Senators Chris Murphy (D-Conn.) and Chris Van Hollen (D-Md.) introduced the COVID-19 Medical Debt Collection Relief Act, legislation to prevent health care providers from taking drastic steps to collect medical debts from patients – including seizing bank accounts and garnishing wages.
Nearly one in four working-age American adults report having problems paying their medical bills. As our nation battles the COVID-19 pandemic, the financial and health consequences of medical debt are even more troubling. Reporting across the country has shown that some hospitals continue to seize bank accounts and garnish wages in order to collect medical debts, preventing Americans from using these funds to meet basic needs, like buying food or paying rent. The COVID-19 pandemic has also underscored longstanding racial inequities in our health care system. Data shows that Black and Latinx individuals are three times more likely to contract COVID-19 and twice as likely to die from COVID-19 – these same communities face significantly higher rates of debt collection and wage garnishment while simultaneously having less accrued savings and wealth.
In May, Murphy and Van Hollen sent a letter to U.S. Department of Health and Human Services (HHS) Secretary Alex Azar urging him to take action to prevent hospitals from garnishing workers’ wages as a means to collect medical debt and that HHS should not provide emergency relief funds to hospitals undertaking this practice on consumers. Over the past year, Senator Murphy held listening sessions in Norwich and Stamford to hear from patients, advocates, and researchers about the impact of medical debt in communities across Connecticut.
“In the richest country in the world, you shouldn’t go bankrupt just because you get sick. But that is exactly what is happening in America right now, even as our country faces a once-in-a-century health and economic crisis. The legislation Senator Van Hollen and I are introducing today suspends all extraordinary actions by health providers for medical debt during the COVID-19 pandemic and holds health care providers and their agents liable for failure to comply. Medical debt accounts for almost two-thirds of all bankruptcies in this country, and as our country faces double digit unemployment, we shouldn’t be giving Americans one more reason to worry,” said Senator Murphy.
“As the COVID-19 pandemic continues to rage across our country and families struggle to pay their rent and put food on the table, it’s unconscionable that some hospitals continue to seize patients’ wages and bank accounts to collect medical debts. This draconian practice can strip families of all they’ve got in one fell swoop. We should never allow medical debts to ruin peoples’ livelihoods – but especially not as we face this pandemic. That’s why we have introduced this legislation, and I’ll be pressing my colleagues to include these urgent protections in the next COVID-19 relief package,” said Senator Van Hollen.
"In the middle of a pandemic, families are struggling with medical debt. Through this bill, Senators Van Hollen and Murphy are standing up for consumers by creating a reprieve for tens of thousands of families who are grappling with medical debt right now, and need time to get back on track financially," said National Consumer Law Center Attorney Jenifer Bosco.
“As families across the country continue to struggle to make ends meet during the pandemic, we cannot allow the threat of sky-high bills or medical debt to deter people from seeking care for themselves or a family member,” said Emily Stewart, executive director of Community Catalyst. “Aggressive medical debt collection practices disproportionately target Black Americans, who are already facing the brunt of the crisis through higher death and infection rates and job losses. Congressional action is urgently needed to alleviate the pressure medical debt has and will continue to cause families if it’s left unaddressed. We applaud Senators Van Hollen and Murphy for their leadership in proposing legislation that would put critical protections in place to shield people from medical debt during this crisis.”
The COVID-19 Medical Debt Collection Relief Act would:
- Suspend all extraordinary collection actions by health care providers for all medical debt (e.g. wage garnishment, bank account seizure) during the covered period (i.e. from February 1, 2020 until the later of the end of the public health emergency or 18 months after enactment of this bill).
- Allow suspension of existing repayment plans during the covered period for any medical debt, and ensure reasonable forbearance and repayment options for consumers. Interest or fees shall not accrue while the payment plan is suspended.
- Implement consumer protections for medical debt that was incurred between February 1, 2020 and 60 days after the end of the public health emergency for COVID-19-related testing and treatment, including:
- One-year extension of federal and state health insurance appeal deadlines;
- Prohibition on accrual and collection of fees and interest related to these debts;
- Prohibition on any extraordinary collection actions.
- Hold health care providers and their agents liable for failure to comply.
Text of the legislation can be found here.