ST PAUL, Minn. — On Monday, state lawmakers made moves to help Minnesotans get out from under their medical debt.
Governor Tim Walz was joined by Attorney General Keith Ellison and Senator Liz Boldon and Representative Liz Reyer, the authors of the bill.
“Life-saving cancer treatments or a trip to the emergency room shouldn’t cause a tanked credit score or a lifetime of debt,” said Governor Walz. “Thanks to the work of the Attorney General, legislators, and Minnesotans who’ve shared their stories, these reforms will help Minnesotans get the care they need, manage their medical debt, and feel protected in their most vulnerable moments.”
This legislation, part of the Minnesota Debt Fairness Act, plans to ease medical debt by:
- Banning medical providers from withholding medically necessary care because of unpaid debt;
- Stopping medical debt from impacting credit scores
- Eliminating automatic transfers of medical debt to a patient’s spouse
- Establishing strong new protections from unethical medical debt collection practices
- Requiring medical providers to publish medical debt collection practices
- Creating a new process to help people dispute medical coding and billing errors
The Minnesota Debt Fairness Act, passed in the 2024 session, makes additional reforms, including establishing automatic income-based wage garnishment levels. Instead of the flat 25% garnishment that existed previously, garnishments will range from 10% to 25%. The Act also extends Minnesota’s wage garnishment protections to independent contractors and everyone living and working in the state.
Previous to the bill passing, resistance came from credit agencies and hospital groups that cautioned lawmakers about the unintended consequences of changing the rules. They raised some of those issues when the Senate Commerce Committee heard the bill on March 14, 2024.
Danny Ackert of the Minnesota Hospital Association said hospitals wrote off $537 million in uncollectible debt in 2022, and $280 million of that was from patients with insurance who couldn't afford their copays and deductibles.
"The hospital association is concerned that provisions in Senate File 4065 pertain to medical debt in combination are not appropriately balanced," Ackert told the panel.
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