People of Color in New York Would Particularly Benefit from Medical Debt Protections

Health Care for All New York is delighted that the new budget deal includes key HCFANY legislative agenda items, including: the reform of our State’s broken Hospital Financial Assistance Law (HFAL); the elimination of cost-sharing for insulin; a program to provide enhanced subsidies to help offset the costs or premiums of cost-sharing in the Marketplace; and continuous coverage for children up to age six in our State’s public health insurance programs. But HCFANY is hugely disappointed to see that Coverage4All was not included in the final deal. And in a break with the Assembly’s historic support for Community Health Advocates, it maintained over a 50 percent cut to its allocation ($1 million in 2023 decreased to $469,000 in 2025). 

The Budget deal reforming our state’s broken HFAL will provide enormous relief to New Yorkers. Over the past 7 years, New York’s “charitable” hospitals have sued over 80,000 patients contributing to the grim statistic that 760,000 people have medical debt. The ubiquity of these lawsuits will now be significantly curtailed. The new law outright bans lawsuits against patients with incomes below 400% of the federal poverty level (FPL), which is about $60,000 for an individual. It also requires hospitals to provide free care to patients with incomes up to 200% of FPL ($30,000 for an individual), and heavily discounted care between 10-20% of the Medicaid rate – for patients up to 400% of FPL. Further, hospital payment plans cannot charge more than 5% of a patient’s gross family income in a year. And it eliminates burdensome “asset” test rules that became a cover for bureaucratic applications where patients have to prove the negative: that they are not secretly stashing their wealth in an effort to get help paying for healthcare. Finally, hospitals will be barred from including “immigration” eligibility tests for financial assistance.

Another positive aspect of the budget for healthcare consumers is the inclusion of a law that eliminates cost-sharing for insulin for enrollees in state-regulated health insurance plans. More than 1.5 million New Yorkers have diabetes, of which about 500,000 people rely on insulin. This provision will help many diabetics, but especially people of color, seniors, and people who live in low-income households, who disproportionately suffer from diabetes complications, including kidney failure, blindness, and loss of limbs.

Two key coverage provisions were also included in the final budget. First, New York will join the states of Oregon and Washington to guarantee continuous public insurance (Medicaid and Child Health Plus) coverage of children up to the age of six. This provision will help families avoid costly gaps in health coverage.  Second, the budget includes authorization to improve cost-sharing or premium assistance programs for people enrolling through the Marketplace. Few details are out, but HCFANY will post about these measures as they are finalized.  

While the Budget news is mostly good, HCFANY is hugely disappointed that the Assembly Leadership has broken with its storied tradition of standing up for healthcare consumers in two important areas. First, the Budget deal failed to include Coverage4All, a foregone conclusion by the Assembly’s omission in its one-house budget bill. Second, the Assembly continued to maintain over a 50% cut in its share of funding for the Community Health Advocates program which serves over 35,000 consumers a year, saving them $36 million in health care costs. 

Our work is not done!  For the remainder of the session, which ends on June 6, HCFANY will focus on trying to secure the passage of the stand-alone Coverage4All bill (S2237B|A3020), which would authorize the Governor to amend the 1332 Waiver to secure funding for covering up to 150,000 immigrant New Yorkers, as well as the “Stop SUNY Suing” Act (A8170|S7778), which would prevent the five state-operated hospitals from suing their patients with medical debt. 

One Pager: New York’s Reformed HFAL

Guest post by Lois Uttley, Women’s Health Program director at Community Catalyst and co-founder of Raising Women’s Voices for the Health Care We Need

When the first wave of COVID-19 hit New York City in the spring of 2020, it starkly revealed something health advocates had been worried about for some time. The neighborhoods when people of color were being hardest hit, such as in Queens and Brooklyn, were also the places where hospitals had closed or downsized in recent years, leaving inadequate capacity to meet the pandemic needs. The result was overcrowding, long lines and delays in evaluation and treatment.

A new law signed by Gov. Kathy Hochul in late December will help address this problem when hospitals and most other health facilities propose new changes, including reducing or eliminating services. Described as “landmark” legislation by its Assembly sponsor, Health Committee Chair Richard Gottfried, the Health Equity Assessment Act will for the first time require an independent assessment of the impact of such proposed changes on medically-underserved New Yorkers. The legislation (A191a/S1451a), sponsored in the Senate by Health Committee Chair Gustavo Rivera, was a top 2021 priority for Health Care for All New York and allies in the Community Voices for Health System Accountability (CVHSA) alliance.

The required independent health equity assessment would take place during preparation of a health facility’s Certificate of Need (CON) application to the New York State Department of Health seeking approval of a proposed transaction. Under the law, such an assessment must determine whether a proposed project would improve access to hospital services and health care, improve health equity and reduce health disparities within the facility’s service area for medically-underserved people. “Medically-undeserved” is defined in the law to include racial and ethnic minorities, immigrants, women, LGBTQ+ people, people with disabilities, uninsured people and those with public insurance (such as Medicaid) as well as older adults, rural residents and people living with “a prevalent infectious disease or condition” (such as HIV).

Included in the assessment will be the extent to which the project would provide indigent care (both free and below cost), the availability of public or private transportation to the facility, the means of ensuring effective communication with non-English speaking patients, as well as those with speech, hearing or visual impairments and the extent to which the project would reduce architectural barriers for people with mobility impairments.

The health equity assessment must involve meaningful engagement of residents and leaders of affected communities, as well as public health experts, employees of the health facility and other stakeholders. HCFANY and CVHSA fought hard for the requirement that the health equity assessment must be posted on the NYS DOH website, as well as the health facility’s website, so that the community can read the assessment document and provide comments.

While the law does not require the disapproval of projects that don’t fare well in health equity assessments, it will certainly encourage health facilities to include provisions that address the needs of medically-underserved people, in order to secure state approval. Moreover, the assessments will provide valuable information for DOH officials and members of the Public Health and Health Planning Council, which approves major projects. They could potentially attach conditions to approvals of projects, in order to improve the health equity impact.

The effective date of the law, which was originally six months from signing, was extended out to 18 months by the Governor’s office, to allow for rulemaking by the NYS DOH and PHHPC. This means that HCFANY and CVHSA members will need to be actively involved in the rulemaking process, to ensure that the intent of the law is preserved in the implementing rules.

Author: Emily Vaculik, Citizen Action of New York    

The COVID-19 pandemic has exacerbated the debt problems of many Americans but has had particularly bad impacts on those already struggling. Families devastated by the impacts of the virus often have to confront additional burdens — abusive debt collection tactics for their medical bills. Decades of discriminatory financial policies have led to a disproportionate amount of debt collection harassment in Black and Brown communities. In December 2019, The Urban Institute found that debt collection had affected 42% of Black consumers; but only 26% of white consumers. According to an article in the New York Amsterdam News, the largest portion of debt for communities of color comes from medical services and student loans (read the article here).

              A 2017 survey by the Consumer Financial Protection Bureau (CFPB) found that Black Americans are contacted by debt collectors at higher rates than white respondents: 44% of Black respondents reported being contacted about debt, while only 29% of whites were contacted. Even when income gap differences are accounted for, Black Americans are sued at higher rates: 45% of respondents living in communities of color faced debt collection litigation, while only 27% of similarly situated respondents in white communities were sued.

              On October 30, 2020, the CFPB released a regulatory revision for the enforcement of the Fair Debt Collection Practices Act, the federal law that prohibits debt collection companies from abusive, unfair or deceptive debt collection practices. The revision allows consumers to limit the amount of harassing phone calls from debt collectors by restricting how often debt collectors may contact affected consumers. While the revision was important, it did not do enough to remedy abusive debt collection practices – particularly for communities of color. Debt collectors have the ability to seize money and personal property in their pursuit of debt collection – devastating families economically and often impeding them from paying for their basic needs like food, clothing, housing and utilities. This has a particularly detrimental effect on Black and Brown communities trying to recover from their discriminatory exclusion from the financial mainstream.  

              New York should consider adopting stronger policies regarding debt regulation to protect consumers from harassing debt collection practices. One legislative proposal is the Patient Medical Debt Collection Protection Act (PMDPA), which particularly addresses medical debt – one of the main sources of debt for Black Americans. The PMDPA addresses several debt collection practices, including shortening the statute of limitations for collection of medical debt and lowering interest rates on medical debt. New York needs stronger protections to protect consumers, particularly Black and Brown consumers, from pervasive predatory debt collection practices.