Medical Debt Protections Paired with Debt Elimination and Addressing High Health Care Cost Leads to Health Equity

Testimony from NJPP Senior Policy Analyst Dr. Brittany Holom-Trundy in support of prohibiting reporting medical debt to credit agencies.

Published on Jun 26, 2024 in Health

Good afternoon Chairman Sarlo and members of the Committee. Thank you for this opportunity to provide my testimony on S2806, the Louisa Carman Medical Debt Relief Act. My name is Dr. Brittany Holom-Trundy, and I am a senior policy analyst at New Jersey Policy Perspective (NJPP). NJPP is a non-partisan, non-profit research institution that focuses on policies that can improve the lives of low- and middle-income people, strengthen our state’s economy, and enhance the quality of life in New Jersey.

NJPP supports the goals of S2806, which are to prohibit the reporting of medical debt to credit reporting agencies and ensure that patients are protected from financial ruin just from seeking medical care. This is particularly crucial for the well-being of the state’s residents with lower incomes. Many with lower incomes avoid preventative medical care due to costs and time restrictions, meaning that those with the least are also the most likely to face medical emergencies.[i] Beyond the burden of the debt, the current status quo means that this debt can be reported to credit reporting agencies and impact other vital needs: with a reported debt, suddenly housing and other means of support may be inaccessible, making more medical issues even more likely. This is true not only for those without insurance, but for those with insurance coverage and up-to-date preventive medical care as well, as unexpected medical emergencies happen and affordability remains a critical issue.[ii]

However, there are a few amendments that would make this bill stronger for the patients that it is seeking to assist. For example, it is important to strengthen the ability of patients to take action when violations of the bill occur, as well as ensure that the care-providing entity remains responsible for offering a reasonable payment plan. Additionally, it is important that all means by which patients pay for care are included in this reporting ban — meaning that things like certain medical care credit cards and the broad category of “secured debt” should not be excluded.

It is important to note that this bill does not address the root issue of high costs in our health care system, nor does it eliminate medical debt altogether. However, this will at least provide families with the knowledge that medical debt will not pervade their lives and create obstacles to other basic necessities. This bill is crucial to addressing calamities and the ways that our expensive health care system currently cripples families for life. By prohibiting the reporting of debt to credit reporting agencies and ensuring that patients are protected, we can bring more humanity to our health care system and promise residents that medical debt will not control their future.

We hope that the Committee will agree and release this bill with the adoption of the proposed amendments suggested by the groups here today.

Thank you for your time.

End Notes

[i] U.S. Census Bureau, Most Vulnerable More Likely to Depend on Emergency Rooms for Preventable Care, 2022. https://www.census.gov/library/stories/2022/01/who-makes-more-preventable-visits-to-emergency-rooms.html

[ii] Commonwealth Fund, The Cost of Not Getting Care: Income Disparities in the Affordability of Health Services Across High-Income Countries, 2023. https://www.commonwealthfund.org/publications/surveys/2023/nov/cost-not-getting-care-income-disparities-affordability-health

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