The Cure for Medical Debt
What is the problem?
Medical debt is a growing crisis across the country, impacting 31% of Medicaid beneficiaries. Louisiana residents owe nearly two billion dollars in medical debt.
Why is it important?
Medical debt can lead to wage garnishments of up to 25% of a person’s “disposable income” and is the most common reason for foreclosure. Most states do not limit hospitals, collections agencies, or debt buyers from placing a lien or foreclosing on a patient’s home to recover unpaid medical bills.
What is the solution?
States can introduce policies that require hospitals to provide charity care to reduce the risk of incurring medical debt for the most vulnerable populations.. For example, Maine requires hospitals to provide free care for patients under 150 percent of the federal poverty level, while the District of Columbia requires hospitals provide free care for those under 200 percent of the federal poverty level. Louisiana lawmakers should also prohibit wage garnishments for medical debt and expand upon the homestead exemption for medical debt to cover all residents, not just those that are uninsured.