Mental Health and Medical Debt

Guest Post By Missy Genadri, Economic Mobility and Health Policy Associate | Children’s Defense Fund – New York

The COVID-19 pandemic has unequivocally laid bare the deep-rooted and irrefutable racial and ethnic health disparities that have long negatively impacted New Yorkers of color – and the devastating consequences such disparities can have.  But our State’s wide-ranging racial inequities are not limited to health outcomes or access to care; they encompass such broad areas as economic security and mobility, educational opportunity, involvement in the child welfare system and workforce disparities.  In fact, in a national comparison of state structural inequities, New York was recently classified as having among the highest structural racism and income inequality indexes in the United States.  Black New Yorkers are more than twice as likely as whites to die in their first year of life, almost twice as likely to not finish high school and almost five times as likely to be incarcerated.  Latinx New Yorkers have an unemployment rate more than double that of whites and have experienced pandemic-related food insecurity at rates three times higher than those of white New Yorkers.  Asian Americans have the highest poverty rates in New York City.  In Manhattan, Black and Latinx children are 10 to 13 times more likely to live in poverty than white children, and Asian children are 5 times more likely to live in poverty than white children.

Enacting new State legislation and rules without first evaluating their potential to disproportionately impact New York’s communities of color only perpetuates such disparities.  Just as our legislators consider the fiscal and environmental impacts of new laws, so too must they examine the potential racial and ethnic impact of all proposed legislation and rule-making activity through the preparation of racial impact statements.  In the absence of such assessment, even legislation that might “appear” race-neutral at face value will, in practice, adversely – and disparately – affect New York’s children and families of color.

By embedding racial impact analysis into our State’s legislative and rule-making processes through the preparation of racial and ethnic impact statements, New York would join a growing rank of states acting to center racial equity in policymaking.  Doing so would also enable our State to build on progress made in advancing racial equity in New York City through such efforts as EquityNYC and the NYC Racial Justice Commission.  Since 2008, 22 states (including New York) have proposed racial and ethnic impact statement legislation and eight states – Colorado, Connecticut, Iowa, Maine, Maryland, New Jersey, Oregon and Virginia – have passed laws requiring racial impact statements in certain circumstances.  However, these impact statements are either limited in the scope and quantity of the legislation they touch, are largely informational, are not publicly available or are only created temporarily as part of a pilot program.  (Read Leveraging Racial & Ethnic Impact Statements to Achieve Racial Equity in All Policies: National Context.)

As no state yet requires the production of racial impact statements for all legislation and rules, New York could lead the nation in aiming towards equity in all policies.  To do so, New York should require all bills and amendments to bills in the legislature as well as all proposed rules to be accompanied by a racial and ethnic impact statement and should consider establishing an independent office to produce these statements.  Furthermore, our State must prohibit the adoption of bills and rules that have the potential to increase racial or ethnic disparities.  Doing so would enable New York to only legislate policies that uplift – not harm – our most marginalized communities.

Undoing generations of institutionalized racism demands our active examination of the role which legislative and regulatory action plays in perpetuating inequality in our State.  The longer we go without incorporating racial and ethnic analysis into our legislative and rulemaking processes, the longer we will continue to pass laws that disparately harm New Yorkers of color – both in the immediate future and for generations to come.  It is well past time for our State to take urgent and decisive action towards the moral imperative of ending systemic racism – and towards creating a more equitable future for New York’s children and youth.

Read Leveraging Racial & Ethnic Impact Statements to Achieve Racial Equity in All Policies: National Context here.

To learn more about CDF-NY’s efforts to incorporate racial and ethnic impact analysis into lawmaking or to join our statewide workgroup, please contact Missy Genadri at mgenadri@childrensdefense.org.

We are proud to partner in this work with a growing group of organizations including Hispanic Federation, Health Care for All New York (HCFANY) Coalition, FPWA, Community Service Society of New York, United Way of New York City, Coalition for Asian American Children & Families, NAACP New York State Conference, New York Urban League, Robin Hood, Metro New York Health Care for All Campaign, Make the Road New York and Brookings Institution.

New York’s non-profit hospitals can seize up to 10% of a patients’ wages to collect medical debt, an aggressive tactic that puts the health and well-being of low-income New Yorkers at risk. 

The Community Service Society of NY’s latest research reveals that five of New York’s nonprofit hospitals garnished the wages of 2,216 patients – between 6% and 46% of lawsuit cases – over unpaid medical bills. 

Disproportionately, these folks work low-wage jobs in health care and social services, manufacturing, and retail. This is consistent with national research that indicates medical debt disproportionately impacts people with low incomes and people of color, deepening long-standing inequities.

Meanwhile, the hospitals CSS investigated reported providing only $6 million in financial assistance despite receiving $19 million in state funding meant to cover the costs of patients who can’t afford their care. Non-profit hospitals are required to evaluate patients for financial assistance before garnishing wages, but past CSS research suggests this does not always take place.

Ten states already prohibit the placement of liens on debtors’ primary residences and four states prohibit wage garnishments. Now it’s our turn. A bill recently passed in the New York State legislature (S6522A/A7363A) would ban hospitals from garnishing patients’ wages or imposing liens on their primary residence. The bill awaits Governor Hochul’s signature, and we urge her to sign it immediately.

As New York’s 2022 legislative session comes to a close, advocates are taking stock of progress made on the campaign to end the burden of medical debt for patients across the state. The campaign secured a few important wins, but there’s still work to be done to #EndMedicalDebt.

Only one bill did not pass New York’s legislature: 

  • A8441B/S7625B requires all hospitals to use a uniform application form for financial assistance, making it easier for patients to access. 

Most bills related to patient protections against medical debt passed New York’s legislature, and are awaiting the Governor’s signature:

  • A7363A/S6522B addresses aggressive medical debt collection actions, preventing hospitals from placing liens on patients’ homes or garnishing their wages over an unpaid medical bill. 
  • S2521C/3470C regulates facility fees, charges for a hospital’s overhead costs which unfairly inflate medical bills and are often not covered by insurance. 
  • The HEAL Act (S7199A/A8169) ensures that hospitals can pass on price information to the State’s All Payer Database, an important step towards price transparency for patients. 

New York also made progress on two other issues that cost patients money: 

  • S4540A/A5613 provides due process protections for patients who receive an overpayment through Medicaid and other programs due to mistakes on the part of the State. This one is waiting for Governor Hochul’s signature. 
  • S7837/A8388 was signed and is now the law! The bill created new licensing requirements for Pharmacy Benefit Managers and a Pharmacy Benefits Bureau within the Department of Health. 
    • Pharmacy Benefit Managers (PBMs) are hired by health insurers to administer the prescription drug portion of their coverage plans. This law will help the state understand PBMs’ impact on drug costs and quality, and explore ways to make prescription drugs more available to the people who need them. 

Advocates have made incredible progress in the fight to end medical debt – now, it’s up to Kathy Hochul to finish the job.

To learn more about the campaign to #EndMedicalDebt and take action, visit cssny.org/EndMedicalDebt. Burdened by large medical bills? Submit your story to wethepatientsny.org.

Carol Voytko, a 48-year old former health care worker, is “physically and mentally exhausted.” Not only has her breast cancer left her unable to work, but she still does not qualify for financial assistance – leaving her over $500,000 in debt from surgeries, radiation and chemotherapy, even with private insurance. The financial battle she faces, in addition to fighting cancer, takes a large psychological toll. 

Medical debt not only impacts patients’ finances and futures, but also worsens their mental health and well-being. According to an Associated Press-AOL survey, debt-related stress can create a variety of additional long-lasting health burdens. 29 percent of poll respondents suffered severe anxiety from debt, compared with 4 percent in the general population. 23 percent reported severe depression.

Our health system shouldn’t make us sicker. In the short-term, reforms like expanding access to financial assistance, regulating facility fees and ending aggressive debt collection practices can provide much-needed financial relief for New Yorkers. Next, New York must pass the New York Health Act to create a fairer, more equitable system to protect patients’ health and well-being.

May is Mental Health Awareness Month. To learn more, visit nami.org. Are medical bills affecting your mental health? Submit your story to wethepatientsny.org.