NCLC Calls for Ban on Placing Medical Debt with Third-Party Agencies

A report that has been published by the National Consumer Law Center highlights a racial gap in the amount of medical debts being carried by African-American individuals, compared to white, non-Hispanic households. The amount of medical debt owed by African-Americans is exacerbating the racial health and wealth gaps felt by individuals of different races living in the United States. To correct this, the NCLC is recommending, among other actions, the prohibition of placing medical debts with third-party collection agencies.

Nearly 28% of African-American households are carrying medical debt, compared with 17% of white, non-Hispanic households, according to the report. Given that African-Americans are carrying more medical debt, the report concludes that African-Americans are more likely to be subjected to what the report calls “aggressive” debt collection efforts, such as placing accounts with collection agencies, filing lawsuits to collect on unpaid debts, garnishing wages and tax returns, and seizing assets from bank accounts.

“Due to long-standing racial inequities in health and wealth, the medical debt crisis has impacted Black families more acutely than white families,” said Berneta Haynes, staff attorney at the National Consumer Law Center and author of the report, in a statement. “In recognition of the explicit role racism plays in medical debt and health disparities, advocates and leaders should take action to protect Black patients from unaffordable medical bills that trap families in a cycle of financial insecurity.”

To combat the racial inequalities spotlighted in the report, the NCLC recommends prohibiting aggressive debt collection by banning wage garnishments, bank account seizures, and other measures, while also prohibiting healthcare facilities from turning accounts over to third-party agencies.

The report is the latest in a series of reports that have been release attempting to quantify the amount of medical debt being paid off by individuals in the United States while also serving as a potential indicator that some form of regulation or enforcement actions might be on the horizon with respect to medical debts and how they are collected.

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