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

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.

Learn what’s in the HEROES Act from New York’s Congressional leaders and advocates, and find out what you can do get it enacted! The HEROES Act, which already passed the House, would provide much needed pandemic relief and protect the programs, like Medicaid, that are helping people get by during the crisis. Read more here, and register for the virtual rally here

Action step – Sign-ons needed by close of business tomorrow:

Sign your organization on to this letter (link) drafted by Citizen Action of New York, Medicaid Matters New York, Health Care For America Now, and HCFANY. The letter thanks Senators Schumer and Gillibrand for their work so far to protect New Yorkers during the pandemic – and describes what New Yorkers need included in an enacted version of the HEROES Act. Add your organization’s name here


Also Coming Up: 

100 Years On: Celebrating and Championing Our Civil Rights and Social Programs

So many of our most important civil rights laws and social programs were created in July and August – the National Labor Relations Act (1935), Social Security (1935), the Civil Rights Act (1964), Medicare and Medicaid (1965), the Americans with Disabilities Act (1990). Join fellow New York advocates to celebrate these achievements and fight for justice! 

  • Dessert Party for Democracy: A Multi-Generational Celebration. We will share pictures and videos of everyday people sharing stories and holding signs saying “I celebrate X because…” We will end with a toast and display of your dessert, holding up signs, including all members of your family or household. August 13, 7:00 – 8:00 PM, register here.
  • Renewing the American Promise: Defending and Expanding Our Social Contract. Learn more about the civil rights and social programs that everyday New Yorkers benefit from and learn how these programs and laws are at risk.  August 19, 12:00 – 1:00PM, register here.

Between 2015 and 2019, New York’s hospitals sued 40,000 New Yorkers who could not pay their medical bills. Hospitals were unable to file new lawsuits against patients for a couple of months during the pandemic. However, a quick look at just the most litigious hospitals shows over 500 cases filed since courts starting accepting civil cases again.

A new map from the Community Service Society (with help from BetaNYC) shows where residents are most likely to be sued by their hospital. Residents of Fulton and Steuben County – areas where patients lack many choices about hospital care – are most frequently sued. In the New York City area Nassau, Suffolk, and Queens County residents are most frequently sued.

What can we do?

  • Read the original report, which provides more data on the lawsuits, which hospitals filed them, how it impacts health equity, and describes measures that New York could take to stop these abuses.
  • Tell your legislators to stop hospitals and debt buyers from taking collection actions against patients during the pandemic. S8365/A10506 would achieve this and more: it would stop interest from accruing on medical debt during the pandemic, permanently cap interest rates on medical debt at the U.S. Treasury rate from the current 9 percent, extend grace periods for insurance premiums, and stop late fees or credit agency reports against members who pay late premiums.
  • Take action on CSSNY’s End Medical Debt campaign and increase support for the Patient Medical Debt Protection Act. The Patient Medical Debt Protection Act was introduced before the pandemic and already has with 34 sponsors in the State Assembly (A08639) and 18 sponsors in the State Senate (S06757). This bill does more to make hospital billing fairer for patients, including requiring a standardized itemized bill and stopping hospitals from charging unfair facility fees that are not covered by insurance.

There is an urgent need for New York to protect patients from unfair billing practices, and the Patient Medical Debt Protection Act does just that: We can’t take another 40,000 patients being sued before we fix this problem.

Each year, the Department of Financial Services reviews applications from insurers in the individual, small group, and Medicare Advantage markets and decides whether rates should go up, down, or stay the same. This year, insurers are asking for an average increase of 11.7% in the individual market, which is too much for consumers to manage especially in the midst of the economic and health-related repercussions of the COVID-19 pandemic. Submit your comments here by July 5.

HCFANY found plenty of reasons in the individual market filings to reduce or even reverse those increase requests. Find your carrier in the list below to see what we had to say!