An advocacy group in New York is pushing Governor Kathy Hochul to sign a bill into law that would ban hospitals from obtaining garnishments and imposing liens to collect on unpaid medical debts, and has issued a report investigating the practice at five nonprofit hospitals in the state, concluding that indebted patients tend to work low-wage jobs who can ill afford to have their wages garnished.
The group — Community Service Society of New York — has been issuing a series of reports and studies examining the impact of what it calls “extraordinary” medical debt collection practices on consumers. A copy of the latest report can be accessed by clicking here.
The report is an attempt to get Gov. Hochul to sign Bill S6522A into law, which would ban wage garnishments and imposing liens when attempting to collect on unpaid medical debts. The bill has passed the state legislature and is awaiting the governor’s signature or veto.
CSS sampled wage garnishments at five New York nonprofit hospitals, which filed more than 12,000 lawsuits between 2015 and 2020. That total accounted for 23% of all hospital lawsuits brought during that span. Sampling 1,600 garnishments from those cases, the report concluded that 24% of indebted patients worked in healthcare and social service agencies, 20% worked in manufacturing, and 15% worked in retail.
“Inflation’s out of control,” said Elisabeth Benjamin, vice president of health initiatives at CSS and one of the authors of the report, in a published report. “Wages don’t really go very far, especially for low-wage workers, and having a punishing 10% gross family wage garnishment is just a bridge too far for many people.”
The report concludes that garnishments for medical debt should be banned and that financial assistance laws in New York should be changed to allow anyone earning up to 600% of the federal poverty limit to be eligible.