(Medical) Debtors Prison Alive and Well in Champaign County

    -
 and unplanned, and with the rising cost
of health care, many people are quickly
plunged into debt, bankruptcy, financial
ruin, and poor health as a result of mounting
bills and hospitals’ aggressive collection
practices. Champaign County Health Care
Consumers’ work to put an end to these
practices has gained national attention –
including a recent front-page Wall Street
Journal article on local hospitals’ use of
arrests and incarceration to seek payment
from consumers with medical debt.
Since 1997, the CCHCC Medical Billing
Task Force has been organizing
with local consumers to address
erroneous, unethical and illegal
medical billing and collection
practices. As a result of our organizing
for fair, humane, and legal
medical billing and collection
practices, Ralph Nader called
CCHCC’s Medical Billing Task Force a
“national leader in the field – the first local
group to take on this scandal in health care.”
Anyone can incur medical debt.Medical
debt affects the insured, the underinsured,
and the un-insured. However,
uninsured consumers, who
tend to have lower incomes than
insured consumers, and are least
able to pay, are also charged the
highest prices for their health care,
and are therefore often plunged
into the deepest debt.Health care providers,
such as hospitals and clinics, typically
charge their highest prices to uninsured
consumers because there is no third party
payor negotiating a discounted price on
behalf of these consumers.
As a result of high prices and aggressive
collections, the life-sustaining service of
medical care can be transformed into a
painful burden, driving people into debt
and sometimes even bankruptcy – even for
consumers who are working hard to make
payments toward their debt and who have very limited income and ought to be receiving free or discounted
care from the hospital.
When patients cannot afford to pay their bills at the
rate demanded by the health care provider, that provider
often will send them to a collections agency. The last stage
of the collections process involves a lawsuit on the outstanding
debt, heard before small claims court. In small
claims court, medical providers make up a large proportion
of the docket.According to the research of the Land of
Lincoln Legal Assistance Foundation, in a six month period
in 2001, an average of about seven people per week were
directly sued by medical providers in Champaign County
small claims court.
Broke and desperate for relief from collections and
court hearings, many debtors file for bankruptcy. According
to a national study (Melissa B. Jacoby, Teresa A. Sullivan,
and Elizabeth Warren, “Medical Problems and Bankruptcy
Filings,”Nortons Bankruptcy Adviser,May 2000) at
least 40% of bankruptcies in 1999 were due at least in part
to medical debt. The percentage of bankruptcies in East
Central Illinois is even higher. According to research by the
Land of Lincoln Legal, 58% of the studied bankruptcy filings
in East Central Illinois involved medical debt. Even
not-for-profit health providers are suing for collection of
medical debt. About 20% of the studied lawsuits were by
not-for-profit providers.
Other consumers have had their wages garnished and
their assets seized, their credit ruined, liens put on their
homes, their meager retirement savings taken, and have
even been arrested and incarcerated on “body attachment”
orders requested by hospital attorneys. That’s right – local
consumers have actually spent time in jail for unpaid medical
bills even though there is not supposed to be a
“debtor’s prison” in this country.
These aggressive and inhumane medical debt collection
practices by the hospitals are unthinkable, but not
unstoppable. CCHCC has conducted courthouse research,
interviewed community members who have been victims
of these brutal collections efforts, written reports, held
community meetings, sought meetings with our local hospitals
and with elected officials, and worked to provide
information directly to consumers about their rights, even
taking to the steps of the courthouse to distribute pamphlets
for people who are being sued over medical debt.
This past month alone, CCHCC’s medical debt work
has won many important victories and has succeeded in
shining a national spotlight on our local struggle for fair
medical debt policies.
On October 22nd, two vans full of community members
and CCHCC staff members went to a legislative hearing
in Chicago and provided written and verbal testimony
to the Illinois Senate Health and Human Services Committee
Hearing on Hospital Pricing and Medical Debt Collections
Practices. As a result of the hearing, Illinois Attorney
General Lisa Madigan announced that her office is opening
an investigation into hospital pricing and debt collection.
On October 29th, representatives of CCHCC’s Community
Coalition on Medical Debt met with Provena
Covenant to talk to them about these practices and to try
to get changes made at the local level. At the meeting,
Provena agreed to on-going community dialogue about
needed reforms to their debt collection and free care policies.
A meeting between the Community Coalition and
Carle Hospital is scheduled for late November.
On October 30th, the Wall Street Journal printed a
front-page article on our local hospitals’ medical debt collection
practices. The article focused on the local nonprofit,
tax-exempt, charitable hospitals’ practice of seeking
body attachments (warrants) to arrest and jail consumers
who owe medical debt.When these consumers are arrested
and jailed, the bond money that their frightened families
scrape together is then applied to the hospital’s judgment
against them – making one wonder whether our local
courts are helping local hospitals kidnap and hold for ransom
consumers who owe them money for needed health
care services.
It is our collective outrage and revulsion at these practices
that is the driving force behind the reforms to come.
We are truly in the midst of a national crisis of increasingly
unaffordable, inaccessible, and inhumane health care.
While the problem is national, and while there is evidence
that the practices of our local providers are particularly
egregious, the movement must (and has!) started here at
the local level with the involvement and leadership of those
consumers most affected by the policies at hand.We need a
consumer-led revolt against the current structure and
profit-driven priorities of our health care system.
If you are experiencing problems with medical debt
and need help, or if you are interested in getting involved
in community efforts to end harsh medical debt collection
practices, contact CCHCC.