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End Medical Debt: Fight Grows to Stop Hospitals from Suing Patients, Garnishing Wages, Ruining Credit

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The growing problem of crushing medical debt was raised by Senator Bernie Sanders in a national address Tuesday on the American working class. We hear from patients and discuss the fight to stop hospitals from suing patients, garnishing wages and putting liens on homes of people facing medical bills they can’t afford. We are joined by Elisabeth Benjamin, vice president of Health Initiatives at the Community Service Society of New York and co-founder of the Health Care for All New York campaign.

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Juan González.

In a major address Tuesday evening from the U.S. Capitol, independent Senator Bernie Sanders of Vermont gave a national address on the state of America’s working class. He focused in part on the growing problem of medical debt.

SEN. BERNIE SANDERS: I see — I see a nation where over 85 million of our people are either uninsured or underinsured. And as all of you know, we are the only major country on Earth not to guarantee healthcare to all people.

I see a nation where, unbelievably, over 500,000 people go bankrupt each year because of medically related debt. You got that? You were sick, you had a cancer operation, and you know what you get? You go bankrupt as a result. Does that make any sense to anybody?

I see a nation — and we don’t talk about this at all; virtually nobody talks about this — where over 68,000 people die each year because they can’t afford the healthcare they need. I have talked to doctor after doctor, in Vermont and around the country, telling me about patients who walked in the door terribly ill. And the doctor says, “Why didn’t you come when your symptoms — when you first felt your symptoms?” They said, “I don’t have any insurance. I can’t afford to pay it.” And thousands of thousands of people finally crawl into the doctor’s office, and it’s too late, and they die, in the United States of America.

AMY GOODMAN: Senator Bernie Sanders speaking Tuesday night in a major address on the state of America’s working class. To see the whole address, go to democracynow.org.

But today we’re going to look at how more patients are speaking out as they struggle with medical debt. The healthcare reform group We the Patients New York, a project of the Community Service Society, has spoken to many patients. This is Anthony Calafiura’s story.

ANTHONY CALAFIURA: So, slightly over a year ago from now, I was committed to the psych ward after a failed suicide attempt. I was there for 14 days. It genuinely helped me, until I received my bill afterwards. But, thankfully, I was under my estranged father’s insurance. But even then and currently today, I am over $2,000 in debt, and my mother has refused to help me pay, so I have essentially been forced to kind of figure out this whole situation by myself.

And when I was committed, I was 17. So, after I got released, when I tried calling, like, the hospitals, there wasn’t much I could do, because I was still a minor. And it just felt like a circle, and I never really got, like, actual advice on what to do.

Now that I’m 18, it’s been like six months since I’ve been released, so all my debt has been transferred to the debt collection agency. Nobody around me really knows what to do. And this whole situation has just been causing me so much stress. It’s like every time I check my mail, every time I receive an 866 call, which now I know is the debt collection agency’s number, every time I see a minor text, I’m just reminded of how much debt I’m in, and it just makes me really anxious, and it’s been really not good for my mental health, which is why I’m even in debt in the first place, was to get better.

I think there should be a law changed within the medical system. I think in schools they should teach you about how insurance works, even how to manage debt.

For the most part, I’ve just felt really alone, even when there are 23 million Americans in debt, which is, essentially, one in 10 Americans.

In general, the U.S. healthcare system, people shouldn’t have to go into debt, with like little knowledge on what to do after, just to get the medical care that they need. People also just shouldn’t be afraid and resistant to go in to the doctors in fear of the bill that they’re going to receive after.

AMY GOODMAN: And this is Sherel Wilson talking about her medical debt struggles after getting surgery.

SHEREL WILSON: In 2018, I had surgery at Staten Island University Hospital. I received a bill from the attorney stating I owed $100,000 for that surgery. I’m still receiving bills. It is affecting my credit. I’m striving hard, and I did not know what the future was going to hold for me. I’m receiving Social Security. I do have a small pension. But I’m a homeowner. I have to get around, so we have — you know, you have your car.

Our state officials, it needs to be heard, and not to just get my vote, to really listen to the people, to the people that are hurting. See them. See the people that are hurting, that are losing — some of them are losing their livelihoods, but, most of all, their health. And we really need to do something about it.

AMY GOODMAN: Sherel Wilson and Anthony Calafiura were recorded by We the Patients New York, a project of the Community Service Society.

Well, for more on medical debt, who has it, what to do about it, we’re joined by Elisabeth Benjamin, vice president of Health Initiatives at the Community Service Society of New York, co-founder of the Health Care for All New York campaign.

Elisabeth, welcome back to Democracy Now! Can you just lay out this issue, that Bernie Sanders addressed last night and so many people are addressing around the country? What exactly is medical debt? And what are these huge hospitals, that are nonprofits, doing to particularly indigent patients who end up in medical debt?

ELISABETH BENJAMIN: Thank you for having me on, Juan and Amy. It’s nice to be here.

So, how many people have medical debt? Actually, it’s around 100 million people around the country that have medical debt. And that’s racked up to be about $200 million — $195 billion in medical debt people in America are incurring. So, essentially, that’s 20% our nation’s population.

The other thing that’s really extraordinary about this is that there are profound racial and ethnic disparities in terms of who owns medical debt. Twenty-eight percent of African American folks have medical debt. Twenty-two percent of Latino, Latina, Latinx folks have medical debt, 17% of white folks, 10% of Asians. So, basically, it’s a phenomena that really hurts low-income folks and people of color. And that’s what all the evidence shows when there’s any kind of national research, peer-reviewed journal research and so forth. And, in fact, we know from the credit reporting agencies that 58% of debt that’s on people’s credit reports is medical debt. So, it’s a profound problem. It’s a ubiquitous problem throughout the country.

I think what’s most distressing about this is how this medical debt is getting incurred. What we have studied in New York is we did a comprehensive universal analysis looking at every single hospital in New York state, all of which are nonprofit charities, allegedly. And we found that over five years, from 2015 to 2020, by looking at every single county court, you know, civil, small claims court record, that they had sued 53,000 patients. Now, interestingly, not all hospitals sue, but most do — I mean, but many do. It’s like a — it’s sort of a practice that really is done by the sort of big networks and some of the most illustrious hospitals in our system. This phenomena also had been found in other states. Wisconsin, for example, there was a big analysis out there that was published in Health Affairs.

But what we’ve seen is that these nonprofit hospitals, which are bound by IRS rules to not take extraordinary debt collection actions, but these — suing people is quite extraordinary, by the IRS rules, but not only do they sue people and sue kind of a lot of people, at huge volume, but also that’s not good enough. They were charging 9% interest when the interest rates were 1%. They were charging — they were going after people’s homes by putting liens on people’s homes, which ruins someone’s, you know, credit. You might think, “Well, they aren’t foreclosing. Good for them.” But, actually, taking a lien on someone’s home means you can’t get a consumer loan, you can’t get an educational loan, you can’t get a car loan. It ruins people’s lives. If your pipes burst one winter, you can’t get a home equity loan to repair those pipes, if you have a lien on your primary residence.

And then, the other thing we saw was that they were suing six years and beyond. That’s, you know, like, who knows what insurance I had six years ago? I happen to, because I’ve been at the Community Service Society forever, it feels. But other folks don’t know. And so, what we have found was that, you know, what the national data was showing was really happening even in a progressive state like New York.

And the thing that’s kind of cool is that around the country, there are activists in Colorado, there are activists in New Mexico, there are activists in Maryland and Massachusetts, and what’s happening — and Georgia. What’s happening is, on the ground, people are fighting back. And that’s what We the Patients is all about. And that’s what we at the Community Service Society try to do, which is sort of elevate our patients’ experiences and try to change things.

JUAN GONZÁLEZ: But, Elisabeth, many of these hospitals, especially these nonprofit hospitals, number one is, they often report significant numbers of charity care, and they get reimbursed by many states for their supposed charity care. So, what is happening here that they’re still going after people who can’t pay their bills?

ELISABETH BENJAMIN: So, what the hospitals say is, “We do huge amounts of charity care. We do huge amounts of public benefit and public good.” But when you look close at — closely and analyze what they’re reporting as a public benefit, it might be a piano in a marble lobby. It might be — it might be a clinic that they’re running where they actually get Medicaid reimbursement. So, I think we have to look really carefully at those public benefit numbers.

What we noticed in New York state, we actually are one of those states that has what’s called an indigent care pool, and we provide $1.1 billion to our nonprofit hospitals, because we believe in hospitals. Hospitals save people’s lives every single day. We love our hospitals. But these hospitals in New York state were getting around $1.1 billion, but what we noticed is the hospitals that were suing the most and garnishing people’s wages and putting liens on people’s homes typically were the ones that weren’t spending their multimillion-dollar allotment on financial assistance to patients.

And so, how can they get away with that? And one of the ways that they get away with that is there’s no requirement that before they sue a patient, to look closely at the patient’s ZIP code or, you know, all these sort of independent data to see if they’re low-income or not. And when we did a data analysis, I mean, looking at a hospital, like, pulling a random sample of court files, and looked at the data analysis, we found that these hospitals were disproportionately suing in ZIP codes that were where people of color are majority minority, or people of color live, or low-income ZIP codes. So, they weren’t even following the state’s rule, which is they’re supposed to provide financial assistance to people below 300% of poverty.

And when we analyzed the data, we found that these hospitals had been spending less on financial aid than the way they were pulling down from the indigent care pool. Now, the hospitals say, “Oh, but that pool isn’t to provide, you know, financial aid to patients. You just don’t understand. That’s to compensate us for our Medicaid losses.” And, you know, I think if you have a thing called the indigent care pool, and, you know, as a requirement for having money, pulling money as a hospital out of that indigent care pool, you’re supposed to have a financial aid policy, that’s a contingency for pulling funds, that provides charity care or financial aid up to 300% of poverty, then you should spend every single penny you can on financial aid first, before compensating you on your alleged Medicaid losses.

JUAN GONZÁLEZ: And could you name some names? Because, obviously, these hospital chains, they all claim in their advertisements to be for the public good, but yet they’re running up huge endowments. They’re paying tremendous salaries to their executive officers. Name some names of the worst offenders when it comes to going after people for debt.

ELISABETH BENJAMIN: Sure. During the 2015-2020 period that we studied, and we went all the way through December 2020, the hospital system that had sued the most people in New York state was the Northwell system. And they have quite a substantial endowment. I think what was most upsetting about what they were doing is the courts were effectively closed to patients between March of 2020 through December of 2020 because of the pandemic, and we found that they had sued thousands of people, when the courts were effectively closed.

Looking at a different data set, the state Supreme Court data set, where people are represented — the hospital SUNY Upstate in Syracuse is represented by Letitia James, the attorney general of New York, who, you know, claimed that there would be a medical debt moratorium from all SUNY hospitals. They sued around 1,500 people a year. No financial aid, apparently, was really being provided, because even patients who had been sued, who were then, after they had gotten a judgment, were found eligible for financial aid, they still were charging them the interest. This poor woman was still being charged and had to pay the interest and all the other judgment-related expenses, you know, which I guess is technically legal, but is it humane? Anyway, that hospital was suing around 1,500 people right through the pandemic. We found a bunch of cases that were also being prosecuted during the attorney general’s own medical debt moratorium.

So, I think what’s going on is there are very aggressive attorneys who go to hospitals, and in this case, the state of New York, there’s an attorney general’s unit up in Syracuse that is very aggressive, and this is how they make their livelihoods, by suing low-income — disproportionately low-income people of color. And it’s really a shock — shocking, and it has to stop.

And I think that’s what we’re really working hard on, moving forward. We’re trying to say, “Look, don’t let every hospital design and hide their financial aid application. Let’s have a common application for financial aid, like we have a common application for financial aid for college.” Right? We have the one form. Why do we need 210 different forms in New York state? Let’s ban the practice of reporting medical debt to credit agencies. That would single-handedly improve the credit of millions and millions of Americans. So, there’s a couple of bills in Congress that are trying to do that. I think some states are looking into that.

We, here in New York, are going to try to improve our financial assistance situation. We’re really excited because Governor Hochul has called in the State of the State for developing a single, uniform financial aid form. We think that will cut out a lot of the red tape and make financial assistance more available to patients, and really cut down what’s happening here in New York with medical debt, which is completely out of control.

AMY GOODMAN: And finally, we just have a minute, Elisabeth, but the bills that were signed off on by Governor Hochul, of course, started with a grassroots movement in this state just in the last few months.

ELISABETH BENJAMIN: Yes. She did sign, in the last few months. You know, we’re really grateful to Governor Hochul and to the state Legislature for really championing medical debt reform. We passed three bills. We passed a bill that would ban liens and wage garnishments. So, medical providers, when they sue patients, we’re saying, “OK, if you must sue, sue, but don’t go nuclear on people. Don’t put liens on their homes so you’re ruining their credit. Don’t garnish low-income, working-class folks’ wages. That makes no sense. They’ll never be able to pay you back.”

We also enacted a bill that would ban this practice of charging what we call resort fees or facility fees for preventive care, and requiring hospitals and medical providers to tell people about these so-called facility fees. There is no medical service called facility fee in the CPT code. It’s just a resort charge that medical providers like to charge and get away with charging.

And we’ve also reduced the statute of limitations from six years to three years, and the judgment — consumer judgment interest rate from 9% to 2%.

And we’re not done. We’re going to keep fighting this fight. It’s an important fight. And, you know, to this huge symptom, as Senator Sanders said, you know, our problem — our real problem with our healthcare system is that we don’t have a coherent national health system.

AMY GOODMAN: Elisabeth Benjamin, we want to thank you for being with us, vice president of Health Initiatives at the Community Service Society of New York, co-founder of the Health Care for All New York campaign.

Next up, Elite Capture: How the Powerful Took Over Identity Politics (And Everything Else). Stay with us.

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