Colorado mom assumed Medicaid would cover her daughter’s ambulance — until a debt collector took $3K off her paycheck

Nicole Silva wasn’t expecting a bill after her daughter received urgent medical care following a car crash. After all, she says, the entire family was on Medicaid.

But a debt collector took the preschool teacher from Sanford, Colorado, to court over an unpaid ambulance ride totaling $2,181.60, which grew to over $3,000 including interest and court fees, according to KFF Health News. (1) Silva fought the bill, but to no avail, and a judge ordered her wages be garnished to the tune of around $500 per month to pay it off.

As it turns out, she may be among up to thousands of Coloradans who have their paychecks docked each year to pay medical bills — including those supposedly covered by Medicaid.

A KFF Health News review of 1,200 Colorado wage-garnishment rulings from Feb. 1, 2022, to Feb. 1, 2024, found at least 30% stemmed from medical care. Based on this sample, the outlet estimates around 14,000 cases a year in which Colorado courts allow debt collectors to take a cut of people’s wages because of medical debt. KFF Health News notes that figure might be on the low end, since medical debt can be hidden behind credit card debt and payday loans.

Most medical bills amounted to less than $2,400, often growing around 25% as cases made their way through the legal system, according to the review, and some debts should have been covered by Medicaid. For example, KFF Health News says it confirmed with the state’s Medicaid program that Silva’s daughter was covered at the time of the car crash.

Colorado is not an outlier. Forty-five states allow wage garnishment for unpaid medical debt, per KFF. Only Delaware, New York, North Carolina, Pennsylvania and Texas ban it outright. New Hampshire doesn’t ban garnishment but forces collectors to return to court for each paycheck.

It’s a practice that can hurt consumers in different ways. On top of wages being docked, a number of states permit medical bills to appear on credit reports. This can leave people vulnerable to the credit-score fallout of disputed or unaffordable bills.

Medical billing is prone to errors. Colorado’s Health Care Policy & Financing Department told KFF Health News it sent nearly 11,000 warning letters in the past fiscal year to health care providers and collectors who pursued payments from Medicaid patients erroneously. Had Silva received (or recognized) an early bill addressed to her, she may have been able to flag the coverage problem sooner.

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One line of defence patients can use is referring to the explanation of benefits (EOB). This is a statement from your insurer detailing charges following a claim. It will show the cost of care, how much your insurance will pay out and the amount you’d owe, if anything is left. A good tip is to review the form to verify all of the information.

If you get a bill, but the EOB indicates that Medicaid (or another plan) should pay, contact the care provider’s billing office and request a corrected claim.

If you’re faced with an unexpected medical bill, or one has been sent to collections, you may want to consider some of the following actions:

Demand validation: You can check for inaccuracies and request verification the debt belongs to you before making a payment. If the bill should be covered by Medicaid (or is barred by the No Surprises Act), you can dispute your bill or submit a complaint.

Apply for charity care/discounts: Nonprofit hospitals must offer financial assistance, allowing you to inquire about charity care or interest-free payment options.

Don’t ignore court papers: Many garnishment rulings result from default judgments when individuals fail to respond to court requests. Show up to your court date if summoned.

Know your state laws: If you live in a state that allows wage garnishment for medical debt, familiarize yourself with the law to ensure you’re being treated fairly.

Legal advice: If you need help understanding your rights, a nonprofit legal aid facility may be able to assist you.

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KFF Health News (1)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.