Medical Debt Fairness Act Passes In Final Hours

June 9, 2024 8:00 pm
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Legislation passed in the final hours of the 2024 Session should give significant relief for many Minnesotans struggling to pay medical debt.

The message that medical debt collection should not cause people to fall into poverty, bankruptcy and further health crisis was heard and accepted by bi-partisan majorities in both the House and Senate. This message was supported and promoted by this editorial board. While this will not wipe away a patient’s medical debt and it does not address a lack of coverage that caused many Minnesotans to find themselves in this overwhelming financial situation, it is a big first step.

The 161-page consumer policy omnibus bill that contained provisions of the Debt Fairness Act, including for medical debt, was passed by a vote of 70-58 in the House and 34-32 in the Senate. 

Signing the bill on May 21, Minnesota Gov. Tim Walz said, “Medical payments should not be an insurmountable, lifelong burden that impacts your ability to buy a house or retire with dignity. Yet, taking an unexpected trip to the emergency room can wipe out your savings and destroy your credit score. This bill is an important step toward making sure that the fear of medical debt does not prohibit access to healthcare.”

Medical debt reforms included in the signed legislation are:

– Ban medical debt from being reported to credit bureaus.

– Ban medical providers from withholding medically necessary care due to unpaid debt.

– Eliminate automatic transfer of medical debt to a patient’s spouse.

  Ban medical debt collectors from using robo-dialers and from contacting third parties about debt.

– Prohibit parties collecting medical debt from saying medical services will be withheld if the debt is not paid.

– Require medical debt collectors to notify patients of their right to hire an attorney or contact the Minnesota Attorney General regarding the debt.

– When Minnesotans are successful in defending themselves against medical debt collection lawsuits, providers will be required to pay the defendant’s legal fees.

– Require medical providers to publish their medical debt collection practices.

– Establish a new process for patients to dispute incorrect coding or billing of medical care and how it is collected.

Statistics used by supporters of the medical debt legislation, which included Minnesota Attorney General Keith Ellison, were that almost one-third of all working adults in the United States carry medical debt and it is the leading cause of bankruptcies in the country. Making the case that this is a widespread and pervasive problem, supporters were able to garner the support needed to get the law passed.

Opposition to the legislation came from medical health providers who maintained it makes it harder for medical providers to stay in business due to the increased costs and difficulty of debt collection. They also argued the legislation will do nothing to curb the high cost of medical care or the problem of high-deductible insurance coverage carried by patients due to the unaffordability of insurance rates.

In the final deliberations, however, the need for medical debt reform for over-burdened consumers outweighed concerns the legislation would significantly impact medical businesses.

We agree the reforms and relief provided by this new law are appropriate to address the negative impact that medical debt has on so many Minnesotans. Monitoring the effect on medical business needs to be ongoing. For Minnesota to continue as a leader in medical care, legislators must work toward further reforms in the insurance industry and ensure the care provided results in fair payment and ultimately benefits the patient.

When good legislation is adopted and signed into law, most everyone affected should be able to sleep better. This is good legislation.

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