A bill that would require collectors and healthcare providers a payment plan that does not exceed 5% of a patient’s income if he or she has more than $500 in outstanding medical debt while also waiting a year to report medical debts to the credit reporting agencies — among other provisions — moved a step closer to being passed in the Delaware legislature this week.
The bill, the Medical Debt Protection Act, has already passed the state Senate unanimously and was voted out of committee in the state House this week. It was introduced in April. Among the provisions of the bill are:
- Prohibiting collectors and large healthcare providers from charging interest or late fees
- Offering any patient with $500 or more in unpaid debts a payment plan that does not exceed 5% of the patient’s gross monthly income
- Prohibiting “extraordinary” collection actions, such as causing individuals to be arrested, garnishing wages, seizing funds from bank accounts, for foreclosing on any property
- Prohibiting the reporting of medical debts to credit reporting agencies for one year after the consumer is first given a bill for medical debt or three months after the day the most recent payment toward a payment plan was made
- Providing consumers with a private right of action
“The intent of the design is to invite protections,” said William Lescas, deputy policy director with the Senate’s Democratic Caucus, in a published report. “There’s always a risk of somebody that is going to try and find ways around it. But … you have to weigh costs and benefits. And I think it would be doing a disservice to the potential benefit to assume that people are going to openly exploit this.”
One Republican in the Delaware House expressed reservations about the bill.
“There’s absolutely nothing that the healthcare facility can do if I simply don’t want to pay,” said Rep. Jeffrey Spiegelman. “If there’s no way without charging late fees, without being able to garnish, without being able to do that, it doesn’t seem to be much ability if this law passes, to get the money out there…‘They can’t charge me fees. I’ll pay when I feel like paying, and there ain’t nothing you can do about it.’”