Van Hollen, Democratic Senators Urge HHS To Protect Consumers and Prevent Hospitals from Going After Workers’ Wages for Medical Debts

Today, U.S. Senators Chris Van Hollen (D-Md.) and Chris Murphy (D-Conn.) led a letter with several of their colleagues urging Health and Human Services (HHS) Secretary Alex Azar to take action to prevent hospitals from garnishing workers’ wages as a means to collect medical debt. As the Senators note in their letter, hospitals should not take this drastic step during a time of crisis, and HHS should not provide emergency relief funds to hospitals undertaking this practice on consumers.  

“We write to express serious concerns with ongoing instances of wage garnishment by hospitals in aggressive pursuit of medical debt collection during the COVID-19 pandemic. As you prepare to release further tranches of emergency funding to health care providers from the Public Health and Social Services Emergency Fund (PHSSEF), we request that you condition payment of these funds on a commitment by hospitals not to garnish wages as a means to collect medical debt during this public health emergency, regardless of whether the medical debt was incurred during the crisis,” the Senators begin. 

They underscore their concerns, noting, “Wage garnishment for the purposes of medical debt collection raises concerns in normal times. To carry out such aggressive behavior during a pandemic and economic downturn is egregious. On top of that, medical debt is more likely to affect patients with underlying health conditions, and disproportionately communities of color — the same communities being hit the hardest by the COVID-19 pandemic.” 

The Senators ask HHS to take action, stating, “Hospitals are crucial partners in the frontline efforts to treat Americans affected by COVID-19. We appreciate that the pandemic has placed significant demand and strain on our health care system. However, garnishing Americans’ wages at this time offers little gain and tremendous harm in the face of a public health emergency and economic turmoil. Given that HHS has already prohibited surprise billing in its terms and conditions of receiving funds from the PHSSEF, we believe prohibiting wage garnishment is a reasonable addition that would protect struggling Americans from further financial hardship and stress. Entities benefiting from taxpayer-generated relief funds should not then turn around and garnish the wages of those very same taxpayers.”  

In addition to Senators Van Hollen and Murphy the letter was signed by Senators Ed Markey (D-Mass.), Maggie Hassan (D-N.H.), Elizabeth Warren (D-Mass.), Jeanne Shaheen (D-N.H.), Richard Blumenthal (D-Conn.), Sherrod Brown (D-Ohio), and Jeff Merkley (D-Ore.).

The full text of the letter is here and below.

Dear Secretary Azar:

We write to express serious concerns with ongoing instances of wage garnishment by hospitals in aggressive pursuit of medical debt collection during the COVID-19 pandemic. As you prepare to release further tranches of emergency funding to health care providers from the Public Health and Social Services Emergency Fund (PHSSEF), we request that you condition payment of these funds on a commitment by hospitals not to garnish wages as a means to collect medical debt during this public health emergency, regardless of whether the medical debt was incurred during the crisis.

Wage garnishment for the purposes of medical debt collection raises concerns in normal times. To carry out such aggressive behavior during a pandemic and economic downturn is egregious. On top of that, medical debt is more likely to affect patients with underlying health conditions, and disproportionately communities of color — the same communities being hit the hardest by the COVID-19 pandemic. 

The harm inflicted upon patients by wage garnishment is disproportionate to its benefit. Existing research suggests that on average, garnishment cases constitute a small sliver of hospitals’ annual gross revenue—as little as a tenth of a percent. Yet for patients, these bills can wipe out a substantial part of their paychecks, rendering them unable to meet basic needs like paying rent or buying groceries. Siphoning wages is a devastating blow to patients who are already grappling with tremendous financial instability. Rendering someone incapable of paying rent during a widespread stay-at-home order is a cruel catch-22.

Hospitals are crucial partners in the frontline efforts to treat Americans affected by COVID-19. We appreciate that the pandemic has placed significant demand and strain on our health care system. However, garnishing Americans’ wages at this time offers little gain and tremendous harm in the face of a public health emergency and economic turmoil. Given that HHS has already prohibited surprise billing in its terms and conditions of receiving funds from the PHSSEF, we believe prohibiting wage garnishment is a reasonable addition that would protect struggling Americans from further financial hardship and stress. Entities benefiting from taxpayer-generated relief funds should not then turn around and garnish the wages of those very same taxpayers.

We appreciate your efforts to expeditiously distribute relief funding to critical hospitals and health care providers on the frontlines. Thank you in advance for your attention to this matter.

Sincerely,