Prohibiting Reporting Medical Debt to Credit Reporting Agencies Would Help Protect New Jersey’s Most Vulnerable Residents from Financial Ruin

Testimony from NJPP Senior Policy Analyst Dr. Brittany Holom-Trundy before the Assembly Financial Institutions and Insurance Committee.

Published on Jun 13, 2024 in Health

Good morning Chairman Freiman and members of the Committee. Thank you for this opportunity to provide my testimony on A3861, 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 A3861, which would prohibit the reporting of medical debt to credit reporting agencies and ensure that patients are protected from financial ruin just from seeking medical care.

These actions are crucial for the well-being of the state’s families, especially those with lower incomes. Health care researchers have long recognized that poverty and the resulting inaccessibility of health care in and of itself can lead to a greater likelihood for medical emergencies and chronic illnesses because residents with low incomes or who lack insurance do not have access to needed resources and may avoid preventative medical care due to costs and time restrictions.[i] This means that those with the least means to pay for medical emergencies are also the most likely to face them — and with medical emergencies come extremely high bills, requiring money beyond what the individuals and families can afford. This worsens health inequities that we already see in the state; for example, we know that residents of color are twice as likely to have medical debt in collections.[ii]

Even for those with insurance coverage and up-to-date preventive medical care, unexpected medical emergencies happen and affordability remains a critical issue.[iii] People often have to go to the nearest emergency room, regardless of their coverage, and face bills of thousands of dollars simply because they were in an accident or woke up one morning with a failing organ.

It is important to note that this bill does not necessarily 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. In 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] Urban Institute, Debt in America. https://apps.urban.org/features/debt-interactive-map/?type=medical&variable=medcoll&state=34.

[iii] 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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