Establishes a pilot hospital medical debt relief program

• Democratic5

◆ The sponsor's argument

Why Gustavo Rivera says this is needed

Medical debt is an obscene source of stress for thousands of New Yorkers and has been called the most common cause of bankruptcy in the United States. In New York State, medical debt has caused financial hardship for too many families, causing many to be put into collections, to use up all of their savings, or to choose between basic necessities like food or housing and resolving their debt. In the final report of the Discharged into Debt series, issued by the Community Service Society (CSS), a 2022 survey found that 5% of New Yorkers say they are not confident that they can afford routine healthcare and 70% say they aren't confident that they can afford the cost related to major illness. Medical debt is even a concern to those with health insurance who find the rising deductibles and out-of-pocket costs difficult to afford. Many people who participated in the study reported they or a family member avoided medical care, such as not filling prescriptions and skipping tests or treatments, because they were afraid of the bills. Communities of color and low-income communities are the most impacted by medical debt. In the past, hospitals have taken extreme measures to collect debt from patients including reporting patients to collection agencies, filing lawsuits, placing property liens, and garnishing their wages. Between 2015 and 2020 there were over 50,000 medical debt cases filed against patients, and over 4,000 liens were placed on homes in 2017. Hospitals already received millions of dollars of state funding, the Indigent Care Pool, which is intended to compensate for patients who are unable to pay, and yet they are still taking extreme measures against those who cannot afford it. Over the last few years, multiple laws were passed regulating medical debt, limiting surprise fees from hospitals, and forbidding liens on primary residences and wage garnish- ment to collect, but more must be done to help New Yorkers who are still burdened by this crisis. Nobody wants to or plans to be sick. Necessary care should not cause undue financial burden. Medical debt is obscene when healthcare should be guaranteed and affordable. By enacting the Medical Debt Relief Act, not-for-profit organizations will be contracted to purchase the debt of eligible New York residents and cancel the money they owe, helping to keep residents out of debt while resolving payments to hospitals. This legislation was inspired by the work of an organization named RIP Medical Debt, which uses donations from the public and has contracted with other governments around the U.S. to purchase medical debt at a steep discount and abolish medical debt permanently.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.