Van Hollen Reintroduces Legislation to Prevent Seizure of Patients’ Bank Accounts, Wages During COVID-19 Pandemic

Today, U.S. Senator Chris Van Hollen (D-Md.) reintroduced the COVID-19 Medical Debt Collection Relief Act, legislation to prevent healthcare providers from taking drastic steps to collect medical debts from patients – including seizing bank accounts and garnishing wages. According to research conducted by National Nurses United, between 2009 and 2018 Maryland hospitals filed over 140,000 lawsuits against former patients to collect debt. Recent polling also shows widespread support in Maryland to curb these drastic debt collection measures.

“As the COVID-19 pandemic continues to wreak havoc on the health and economic wellbeing of so many Americans, it’s unconscionable that some hospitals are going after patients’ wages and bank accounts to collect medical debts. When many are struggling to pay rent and put food on the table, this practice can leave families destitute. We should never allow medical debts to ruin livelihoods – but especially not as we face this pandemic. That’s why I’ll be pushing to enact this legislation immediately and to better protect Maryland families from medical debt,” said Senator Van Hollen.

Nearly one in four working-age American adults report having problems paying their medical bills. As our nation battles the COVID-19 pandemic, the financial and health consequences of medical debt are even more troubling. Reporting across the country has shown that some hospitals continue to seize bank accounts and garnish wages in order to collect medical debts, preventing Americans from using these funds to meet basic needs, like buying food or paying rent.

The COVID-19 pandemic has also underscored longstanding racial inequities in our healthcare system. Recent CDC data shows that Black and Latino Americans are both more likely to be hospitalized due to COVID-19, and more likely to die from COVID-19 compared to white Americans. These same communities face significantly higher rates of debt collection and wage garnishment while simultaneously having less accrued savings and wealth. 21 percent of Black Marylanders recently surveyed were found to have medical debt they are unable to repay.

The legislation is cosponsored by Senators Jeff Merkley (D-Ore.), Sherrod Brown (D-Ohio), and Richard Blumenthal (D-Conn.). Additionally, it is endorsed by Community Catalyst, National Consumer Law Center (on behalf of its low-income clients), Consumer Federation of America, and the Center for Responsible Lending.

“In Maryland, thousands of families are facing financial hardship from job loss, layoffs, and business closures. Others are grappling with the short and longer-term effects of COVID-19 for themselves and their loved ones. Black and Latinx communities are hardest hit by job loss and COVID-19. During this unprecedented time, no one should also struggle to manage medical debt.  We are grateful to Sen. Van Hollen's leadership in introducing the ‘COVID-19 Medical Debt Collection Relief Act of 2021’ which will strengthen consumer protections related to medical debt for working families in Maryland and across the country,” said Marceline White, Executive Director of the Maryland Consumer Rights Coalition.

“As families across the country continue to struggle to make ends meet during the pandemic, we cannot allow the threat of sky-high bills or medical debt to deter people from seeking care for themselves or a family member,” said Emily Stewart, executive director of Community Catalyst. “Aggressive medical debt collection practices disproportionately target Black Americans, who are already facing the brunt of the crisis through higher death and infection rates and job losses. Congressional action is urgently needed to alleviate the pressure medical debt has and will continue to cause families if it’s left unaddressed. We applaud Senator Van Hollen for his leadership in proposing legislation that would put critical protections in place to shield people from medical debt during this crisis.”

"In the middle of a pandemic, families are struggling with medical debt. Through this bill, Senator Van Hollen is standing up for consumers by creating a reprieve for tens of thousands of families who are grappling with medical debt right now, and need time to get back on track financially," said National Consumer Law Center Attorney Chi Chi Wu.

“In the face of the ongoing COVID-19 pandemic, consumers are facing unprecedented financial challenges and struggling to keep up. It is unbelievable that consumers risk wage garnishment or bankruptcy due to medical debt. We applaud Sen. Van Hollen for continuing to fight for consumers dealing with medical debt and working to provide a much-needed reprieve for American families,”said Consumer Federation of America Financial Services Manager Rachel Gittleman.

The COVID-19 Medical Debt Collection Relief Act would:

• Suspend all extraordinary collection actions by health care providers for all medical debt (e.g. wage garnishment, bank account seizure) during the covered period (i.e. from February 1, 2020 until the later of the end of the public health emergency or 18 months after enactment of this bill).
• Allow suspension of existing repayment plans during the covered period for any medical debt, and ensure reasonable forbearance and repayment options for consumers. Interest or fees shall not accrue while the payment plan is suspended.
• Require providers to notify patients with repayment plans of their ability to suspend them;
• Require HHS to issue guidance on best practices for notifying patients of this option, including taglines that point to language assistance services.
• Implement the following consumer protections for medical debt stemming from COVID-19-related testing and treatment that was incurred between February 1, 2020 and 60 days after the end of the public health emergency: 
  • One-year extension of federal and state health insurance appeal deadlines;
  • Prohibition on accrual and collection of fees and interest related to these debts;
  • Prohibition on any extraordinary collection actions.
• Hold health care providers and their agents liable for failure to comply.

Text of the legislation can be found here.