Congress to consider Medical Debt Collection Relief Act

Though Minnesota’s news outlets report on developments in the coronavirus pandemic every day, few have paid attention to the recent introduction of the COVID-19 Medical Debt Collection Relief Act in the U.S. Congress.

The measure is written “to prevent healthcare providers from taking drastic steps to collect medical debts from patients – including seizing bank accounts and garnishing wages,” say the bill’s authors, Senators Chris Van Hollen (Maryland) and Chris Murphy (Connecticut).

Medical debt affects more than finances

In a press statement, Van Hollen said nearly 1 in 4 adults report struggling to pay medical bills, and that “the financial and health consequences of medical debt” during the pandemic are making matters even worse.

Van Hollen notes that there are hospitals around the nation seizing bank accounts and garnishing wages in order to collect on medical debts. Those actions are preventing the affected people from meeting basic needs such as buying food and paying the rent.

In addition, he states that the “pandemic has also underscored longstanding racial inequities in our healthcare system,” pointing out Black and Latinx individuals face daunting odds: they’re three times more likely to become infected by coronavirus and “twice as likely to die from Covid-19.”

Consumer protections in the bill

Van Hollen said that provisions of the bill include:

  • Suspension of wage garnishment and wage seizure by healthcare providers for medical debt for the later of two events: the end of the pandemic or 18 months after enactment of the Medical Debt Collection Relief Act
  • A suspension of current repayment plans for medical debt, and that no interest or fees can be added during the period

Unsurprisingly, the debt collection industry has made its opposition to the proposal clear. We’ll update you if it gains approval in the U.S. House of Representatives and Senate.