Three-quarters of a million New Yorkers had medical debt in 2022, according to an Urban Institute study. Medical debt disproportionately affects people of color in New York. But a law signed by Governor Kathy Hochul in December 2023 bars healthcare providers, including hospitals, ambulance companies, doctors, physician assistants and other licensed medical professionals, from reporting medical debt to credit agencies. This law also voids any medical debt that is furnished to a collection agency by a hospital, medical provider, or ambulance service.
The law, which took effect immediately upon being signed by the Governor, is good news for those struggling with medical debt. It means their credit scores will not drop due to unpaid medical bills. Maintaining a good credit score is essential for those who need to finance a car, apply for housing, or obtain a credit card or loan for any reason. Before this law took effect, these basic financial tools might have been beyond the reach of those struggling to pay off medical bills.
I have witnessed, in my clients and their families, the anxiety produced, and the negative health implications caused by collection agencies continually calling when the patient is not even healed. My patient advocate colleagues all over the country shared with me that patients in many states forego medical care because they are afraid of medical debt causing them to lose their home or even being jailed for non-payment of medical bills when they are struggling just to make ends meet.
The Urban Institute study showed that people of color were twice as likely as white people to have medical debt reported to a credit agency, and low-income people were three times as likely.
New York became the second state, after Colorado, to enact such a law. The law does not apply to medical debt that has been charged to a traditional credit card or to debt owed to out-of-state healthcare providers. However, it does offer protection from debt charged to credit cards specifically designed to cover medical expenses.
This legislation has the potential to help hundreds of thousands of New Yorkers, including the elderly and those on fixed incomes. It offers them the ability to address medical debt in a way that meets their needs without jeopardizing their financial future and health.
This law is in addition to the ‘no- surprise billing’ laws are steps towards better and more equitable healthcare. See our previous blog on surprise medical billing https://www.careanswered.com/an-unpleasant-surprise-handling-unexpected-medical-bills/
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