Senate Bill 317 includes a policy that limits how much a hospital payment plan is allowed to demand from a patient. Under the bill, a monthly payment could not exceed 10 percent of a patient’s household income and must allow for payments to be made over the course of 24 months. (Lauren Chapman/IPB News)
Hoosiers have an estimated $2.2 billion of medical debt in collections — with even more on payment plans and credit cards. A Senate committee approved legislation Wednesday that introduces a variety of consumer protections against medical debt, including how hospitals create payment plans.
Senate Bill 317 includes a policy that limits how much a hospital payment plan is allowed to demand from a patient. Under the bill, a monthly payment could not exceed 10 percent of a patient’s household income, and must allow for payments to be made over the course of 24 months.
Emily Meyer is a single mother who works three jobs to cover the cost of medical care for her family. She said she often has to choose between putting gas in her car, feeding her kids or paying for medical bills.
“My accounts get turned over to collections because I can't pay a bill full within 10 days after receiving a statement which also affects my credit score,” Meyer said. “I must figure out how to balance the rising costs of nearly everything and the necessity in life and still pay for medical services.”
Meyer was told she was diabetic years ago, but found out she had something called Hashimoto's disease last year. It’s an autoimmune disease where the body’s immune system starts attacking the organ responsible for producing hormones that regulate the body.
Despite her own medical concerns, she has to weigh those concerns against the need to make sure her children are healthy.
“As a parent, we have to put our health and well-being on hold to provide for what we can for our families,” Meyer said. “We then put ourselves at risk for not being able to be there to provide for our families in the future because we aren't able to take care of ourselves.”
Meyer said when she has asked for financial assistance in the past, she has said that she makes too much money.
“The debt collectors are asking to make too high of a payment that I can't physically afford it each month,” Meyer said. “Even when I walk into a doctor's office or the hospital for any reason — to get testing, to get blood drawn, whatever the case may be — they're asking for payment and asking me to turn over whatever money I have in my bank account, if any, or the last of the cash to barely make a dent in a bill that I continued to accrue.”
In addition to being a mother and working multiple jobs, Meyer also volunteers for multiple community organizations, including Crisis Connection. She said she sees people every day with similar stories, who aren’t able to afford the care they need.
“The demand for payments is so overwhelming it causes individuals and families to lose the safety and stability they deserve in life,” Meyer said.
The bill sets out certain requirements on hospitals informing patients about financial assistance. This includes requiring hospital billing statements to include financial assistance information. It also lists requirements on how quickly hospitals must reply to a patient’s request for charity care eligibility and what that response must include.
READ MORE: Advocates: Newly signed laws that could limit debt protections 'frustrating'
Among other things, the bill also includes a provision that limits wage garnishment and liens on a primary residence as a result of medical debt.
The original language of the bill prohibited liens on all personal and real estate property, and banned wage garnishment as a result of medical debt.
However, an amendment to the bill pulled back on those protections.
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The revised bill prohibits wage garnishment — but only for households that make under 250 percent of the federal poverty line. It also prohibits liens on primary residences, but only for those households under 250 percent of the federal poverty line. And it now allows liens on other personal property.
Erin Macey, director of the Indiana Community Action Poverty Institute, said current wage garnishment law is tied to minimum wage, meaning people can be “garnished into poverty.”
Her organization conducts needs assessments. She found that, of the organization's survey respondents, medical debt was the most frequent trade line on credit reports.
“I have heard very compelling testimony from folks who say, you know, ‘I did everything right. I worked hard. I saved. Why am I now meant to—to start back at the beginning?’” Macey said
The bill now heads to the full Senate.
Abigail is our health reporter. Contact them at aruhman@wboi.org.
