The COVID-19 pandemic laid bare racial inequities in New York’s health care system and exposed the deadly consequences when so many New Yorkers go without health coverage, and hundreds of thousands more are left vulnerable with inadequate coverage. As a result, the finances of millions of New Yorkers are at risk.
New York’s hospitals – the state has more than 200 — are nonprofit organizations and designated as charities under the tax code. Unlike the patients they serve, these hospitals pay no income or property taxes. Notably, these same hospitals also receive billions of dollars in financial support through the state’s Indigent Care Pool (ICP) and Medicaid programs.
The ICP program is specifically designed to support them in providing financial assistance to patients and to offset the costs associated with providing uncompensated care. Even so, state law permits these charities to hound their patients into debt through aggressive collection actions, lawsuits, liens and wage garnishments. Not all hospitals utilize these aggressive measures, but a significant minority due, inflicting financial pain upon thousands of patients a year. Simultaneously, medical costs continue to strangle New Yorkers. Patients face hidden hospital fees and are unable to find out how to apply for hospital financial aid.
Healthcare Affordability Disproportionately Affects People of Color
Tens of thousands of New Yorkers struggle with medical debt, thousands more are sued every year, and many more are harassed by collection agents. Unsurprisingly, healthcare affordability disproportionately affects people of color: 3.8 percent of White New Yorkers are uninsured compared to 5.6 percent of Black people and 10.1 percent of Latinos. Outside of New York City, in cities with large Black populations such as Rochester, Buffalo, Syracuse and Westchester, communities of color are up to four times more likely to suffer from medical debt than their white counterparts.
After a two-year #EndMedicalDebt campaign to raise public awareness about medical debt driven by predatory collection practices by some healthcare facilities and providers, state lawmakers have passed legislation protecting New Yorkers from these practices.
This month, state lawmakers passed two bills that were part of the #EndMedicalDebt campaign led by the Community Service Society, and supported by a coalition of nonprofits and consumer advocacy groups, including AARP, Citizen Action of NY, Consumer Reports, the Hispanic Federation, NYPIRG, Make the Road NY and the Long Island Progressive Coalition. S.6522A/A7363A prohibits nonprofit hospitals from imposing liens on patients’ primary residences and garnishing wages due to money judgments arising from debt collection actions by hospitals or health care professionals. The other bill, S.2521C/A3470C, bans hospital facility fees—a secret fee that’s akin to a hotel “resort charge” when you go to a doctor that’s affiliated with a hospital—for all preventative care. It also requires medical providers to notify patients in advance if they will be charged one.
If Governor Hochul signs the bills into law—and we hope she will—it would be a major victory for patients who deserve protection against the most predatory medical debt collection practices that contribute to housing insecurity and jeopardize their physical and fiscal health.
But the fight is not over. A third #EndMedicalDebt bill, S.7625/A.8441, would establish a single uniform financial assistance application for all hospitals to make it easier for patients to find and apply for assistance, kind of like the common application students use to apply for college.
A recent Consumer Financial Protection Bureau (CFPB) report found that 20 percent of Americans have medical debt, underscoring the financial burdens for patients beyond the costs associated with receiving medical care. It said that medical debt collections and credit reporting practices cause significant harm to patients, especially for Blacks and Latinos, low-income families, younger adults of all races and ethnicities, veterans and older adults.
The CFPB report further stated that many families are “coerced into paying invalid, unsubstantiated and inaccurate medical bills” by threat of reporting those medical accounts to the credit reporting bureaus. A New York poll issued in March validated this point, with 20 percent of respondents saying they paid a bill they did not think they owed for fear of being placed in collections or being sued.
Now that state lawmakers have passed legislation that would put an end to harmful liens and wage garnishments by hospitals in medical debt collection actions, as well as provide patients with relief from hidden facility fees, we need them to take similar action to make it easier and more transparent for patients to apply for hospital financial assistance. As they say: An ounce of prevention is worth a pound of cure.
Protecting New Yorkers from hospital policies and practices that contribute to patient medical debt is critical to safeguarding the finances of millions of New Yorkers. We applaud state lawmakers for sending a message to New Yorkers that they can safely seek health care without being threatened with the most extreme medical debt collection practices. All we need now is Governor Hochul’s signature on these bills.
David R. Jones, Esq., is President and CEO of the Community Service Society of New York (CSS), the leading voice on behalf of low-income New Yorkers for more than 175 years. The views expressed in this column are solely those of the writer. The Urban Agenda is available on CSS’s website: www.cssny.org