Medical Debt Fairness Debated in Minnesota Legislature

ST. PAUL (WJON News) - Pieces of the Minnesota Debt Fairness Act are moving through the Minnesota Legislature.

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Companion bills in both the House and Senate were developed in part by the Minnesota Attorney General’s Office after meetings with stakeholders. If passed, the bills would:

Ban medical debt from being reported to credit bureaus
Reduce interest on medical debts from 8 to 0 percent
Ban the withholding of medical services due to unpaid debt
Remove all medical debt creditors’ ability to intercept tax refunds through revenue recapture
Repeal statutory liability for one’s spouse’s medical debt
Require insurers to count copay assistance paid on behalf of a patient to count toward their annual deductible and out-of-pocket limits
Prohibit charging patients fees for coding errors

Minnesota Attorney General Keith Ellison has voiced support for the Debt Fairness Act.

People rarely have a choice about taking on medical debt. Minnesotans trying to catch up with their medical debts should be able to do so without being exploited or pulled into poverty. This plan will strengthen protections for people dealing with medical debt and make it fairer, easier, and more dignified for Minnesotans to gain their financial footing and not get trapped in an unfair, vicious cycle.

The Senate version passed through the Commerce and Consumer Protection Committee, while the House version passed through the Commerce Finance and Policy and the Judiciary Finance and Civil Law Committees with “do-pass” recommendations.

Governor Walz has announced his support for the act.

There’s no way to predict a trip to the emergency room. I’m proud to support this legislation to help Minnesotans manage the unpredictable financial burden of medical care that can wipe out everything from your credit score to your savings account. The plan will lower costs, help Minnesotans manage their medical debt, and protect them in their most challenging moments.

According to a news release, in 2023, the Access to Justice Committee of the Minnesota State Bar Association released a comprehensive report on debt-collection lawsuits across the state.

The report reveals that debt-collection cases dominate Minnesota civil courts and that confusing policies can be burdensome for many Minnesotans without legal counsel. It also finds that 82 percent of debt lawsuits filed in district courts end in an automatic win for the plaintiff, which leads to court-authorized garnishment of wages and bank accounts, and that there exist significant disparities in race and income, with Black, Latino/a, and low-income Minnesotans more likely to be sued.