Medical debt help bill clears Senate, splits GOP caucus

Legislation promoting charity care and payment plans for Hoosier health care patients — plus, protecting their paychecks and homes from debt collectors — advanced from Indiana’s Senate on Thursday, in a 33-15 vote that splintered the chamber’s Republican caucus. It next heads to the House for consideration.

“I’ve had two massive medical bills for having cancer two times,”said Sen. Ed Charbonneau, R-Valparaiso. “I talked to the hospital, and I’ve got a payment plan. They want to get their money, and I want to pay my bill.”

“The people that we are helping with this bill … don’t even know, in many instances, that there is such a thing as a payment plan,” added Charbonneau, who emphasized that such information is often “on page 55 of 100 pages of documents that they get when they check out of the hospital.”

“They’re not going to see that,” he said.

Charbonneau’s Senate Bill 85 deals with medically necessary care.

It would require hospitals to offer payment plans to patients earning less than 400% of the federal poverty line — about $64,000 for a single-person household — or whose bill amount is more than 10% of their monthly household income.

Payment plans would have to extend for at least 24 months, and any one monthly payment couldn’t exceed 10% of the patient’s gross monthly household income. Interest rates would be capped to 3% annually. If insurance coverage is denied, payments would pause while patients appeal the decision for up to 120 days, or until that process is exhausted.

“All we’re trying to do here is to make sure that they get paid,” Charbonneau said of hospitals.

Facilities would also have to develop written notices about any charity care programs they operate, with instructions on how to apply. They’d post the notices in emergency room waiting areas and provide them to patients during intake or discharge — and include a statement that financial assistance is available on billing statements, with a phone number and website link.

Hospitals grossing at least $20 million annually would face additional steps. They’d have 14 days to respond to patients who’ve asked if they’re eligible for charity care programming or payment plans. If patients qualify, the written notices must offer to register them and provide enrollment instructions.

Other provisions would set limits on debt collection.

Collectors could not garnish the wages of patients making 200% or the federal poverty line — an income of about $32,000 annually for one person — and for higher earners, could only take up to 10% of their weekly disposable income above the 200% threshold. Under current law, courts may garnish up to 25% of a patient’s wages to repay medical debt.

“It does not, it does not, it does not remove the obligation for the patient to pay the bill,” Charbonneau stressed. “If there’s a concern about them not paying the bill, well, they had the concern long before this bill.”

Senate Bill 85 also blocks liens or forced sales of patients’ homes over medical debt, but doesn’t, according to Charbonneau, prevent debt collectors from filing lawsuits against patients.

The state’s attorney general would be able to enforce the garnishment and home provisions, and would have to establish a complaint process for Hoosier patients to file against medical creditors and debt collectors.

Thursday’s tally featured a supportive coalition of 23 Republicans and all 10 Democrats, easily outweighing the 15 GOP “no” votes.

Democrats have long sought to get such language across the legislative finish line.

Sen. Fady Qaddoura, D-Indianapolis, “made sure to address every single concern that came out of the last couple of years,” said Senate Minority Leader Shelli Yoder, D-Bloomington. “…  One by one, (he) checked off those concerns and continued building those relationships.”

Qaddoura, a second author on the bill, told his colleagues that approximately 1.2 million Hoosiers would be positively impacted within a few years if it becomes law.

“With gratitude, with love and respect, I appreciate you for giving this bill a chance,” he said. “And I hope that we can continue to work on it.”

Erin Macey, director of the Indiana Community Action Poverty Institute, called the vote a huge step forward.

“Amidst all the challenges we’re seeing, movement on these medical debt bills suggests that legislators are listening. We hope they keep listening and recognizing the crisis that so many hard-working households are facing in trying to access essential healthcare.”

The Indiana Capital Chronicle is an independent, nonprofit news organization that covers state government, policy and elections.