Arizona’s Prop 209 could open a new path to medical debt relief

Pervasive medical debt is one of the major flaws of the American healthcare system. About 4 in 10 Americans have debt resulting from their medical or dental expenses, according to recent estimates. Attempts to reduce the burden of medical debt have stalled, with vested interests sandblasting the legislative apparatus at a time in Congress and in state houses across the country.

This stasis makes an upcoming ballot initiative for a vote next month in Arizona worth watching closely. Arizona Proposition 209 cap the interest rates that can be charged for medical debt: 3 percent. It would also limit debt collectors’ ability to seize a person’s home, property, automobile, or salary if they owe money for medical services by exempting more of a household’s assets. confiscation or garnishment.

The policy itself shares key provisions with model legislation produced by the National Consumer Law Center and discusses some of the cruelest debt collection practices, which policy experts say should help ease the burden of medical debt, especially for people who have been sued by their debtors and are facing to a wage garnishment or the possibility of their home or car being possessed.

“For people in the most desperate circumstances, this rule change is going to make the process a little less cruel for them,” said Joe Gerald, a health services researcher at the University of Arizona.

Equally interesting is how these proposals could become law. Thanks to the work of Healthcare Rising Arizona, which drafted the ballot initiative and collected signatures to put it on the ballot, voters will have the opportunity to directly decide whether to put these new consumer protections in place. In a state currently ruled by a Republican legislature that is largely pro-business, the prospects for legislation like this have been bleak, Gerald said.

According the medical debt policy dashboard, a project that assessed state laws to protect their residents from medical debt, Arizona was rated “poor,” 32nd out of 50 states. In 2015, the most recent numbers available at the state level, the state had a slightly higher share of adults under age 65 reporting medical debt than the national average. The defenders had to overcome an attempt to block the initiative to go to the polls in the first place – and further legal challenges can still wait if that ends up passing – but for now they are cautiously optimistic that new protections will be built up when voters go to the polls in November .

“The thing is, when you have a less governmental approach in a poor state, people get run over by corporations all the time,” said Rodd McLeod, a Democratic political operative who advises the campaign. “It will be a way to have an effect on the number of families struggling with medical debt.”

National groups that focus on medical debt issues are watching Arizona’s initiative closely. It’s undeniably in the weeds – fixed interest rates and wage garnishment rules aren’t exactly bumper stickers – and yet, if even these proposals succeed at the polls, it could open a new way to tackle medical debt outside of the conventional legislative framework to deal with.

“Would it be easier to pass medical debt provisions through the ballot initiative?” said Berneta Haynes, an attorney at the National Consumer Law Center. “Starting with something really bad like this, if it’s successful, does that mean we could be successful with simpler voting metrics?”

Medical debt is a burden for tens of millions of Americans

There is a lot to do. Estimates of the number of Americans with medical debt vary widely, but recent figures from the Kaiser Family Foundation put the number at 41% of all American adults. One in 10 adults owed more than $5,000 for medical or dental services. People with medical debt tend to have lower incomes, poorer health and higher rates of disability, and they are more likely to be black. Medical debt also negatively affects mental and physical health, due to stress and people skipping care for fear of cost.

Kaiser Family Foundation

Although there have been additional efforts to expand health coverage (Affordable Care Act) and restrict predatory hospital billing practices (No Surprises Act) at the federal level, huge holes remain in the system’s safety net. of American health. Recent New York Times report laid bare the lengths that hospitals are always willing to try to force patients to pay for care, even if they are eligible for free services, and to collect those payments if they are in default.

States were more active – North Carolina was consider medical debt reform billand the legislation has spent in colorado in recent months – but progress can be difficult. For example, a bill in New York that would have prohibited collectors from putting liens on homes or garnishing wages blocked this yearalthough supporters hope it will be revived in 2023.

Even with more recent action, the Medical Debt Policy Scorecard ranked only three states as having “good” medical debt consumer protections. The others were weak or poor; Arizona belongs to this last category, even if the reforms proposed to the voters could improve its status.

The campaign relied on testimonials from Arizonans struggling with medical debt, people like Liz Gorski, who volunteered to collect signatures and counterfoils for Proposition 209. Gorski was in a car accident at the age of 15 which put her in a coma and left her with long term care needs. She is now 33 and still sees a pulmonologist about once every three months. She will also see a neurologist every two months.

Gorski estimates that over the years she racked up as much as $50,000 in debt, a combination of her initial hospitalization and struggles to pay for her care in the years that followed. She tried to make medical decisions she thought were best for her — like getting nerve therapy instead of taking painkillers for chronic pain — but her insurance doesn’t always cover those services, increasing her out-of-pocket costs.

The debt that remained on his file after his first stay in the hospital had made it more difficult for him to buy a car or a house as an adult. she says that without Habitat for Humanity, she might have been left homeless. So when she saw an advertisement for Proposition 209, she contacted the organizers and asked how she could help.

“We were all just teenagers. None of us would have been prepared for this,” Gorski said. She backed the ballot measure “because of my own background and what me and my friends have been through. and how it destroyed us”.

The Arizona initiative is intended to help people who find themselves in a situation like Gorski’s, where they have already incurred large medical debts and are trying to minimize the consequences. According to Gabriela Elizondo-Craig, a postgraduate fellow at the University of Arizona who led the dashboard project, the policy experts they interviewed cited improving the experience of people going through the court process without a lawyer and reducing the consequences for people after court as the most consequential actions a state could take. Policies that prevent people from racking up medical debt in the first place – expanded coverage, more financial assistance, presumed eligibility for health coverage, etc. – are another option for decision makers.

According to Elizondo-Craig, 26 states have rules regarding wage garnishment or asset seizure, but only 14 states cap interest rates for medical debt, as Arizona’s ballot measure would.

“These policies focus on people in the most extreme circumstances, but they are also those most in need of protection,” she said.

It’s also possible, Gerald said, that a stricter political landscape for debt collectors could make them more generally less aggressive — a kind of beneficial chilling effect. It’s speculative for now, but Elizondo-Craig said anecdotally she’s heard from people working in hospital debt collection that the greater the administrative burden on providers or collectors, the less likely they’ll be. to pursue unpaid debts.

The problem does not disappear, but the legislative progress stops. Arizona will be a test case: Are voters willing to step in to ease the medical debt burden if lawmakers don’t?

“I think we’re going to continue to see an increase in activity,” said Eva Stahl, vice president of public policy at RIP Medical Debt, “given the frustration of not being able to address this at the federal level.”

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John A. Bogar