Pa. House Passes Medical Debt Relief Act
HARRISBURG, Pa. (ErieNewsNow) - Medical debt is the leading cause of bankruptcy in the United States. The same is true in Pennsylvania. In many cases, debt discourages patients from seeking necessary medical care, which can ultimately lead to death.
“I've personally seen patients who've died because they haven't sought medical care, because of the medical debt they have,” said state Rep. Arvind Venkat (D-Allegheny).
Rep. Venkat, an emergency physician, knows firsthand the impact medical debt can have on care. That’s why he sponsored legislation to create the Medical Debt Relief Program. House Bill 78 would establish the program within the Department of Health to discharge medical debt of eligible residents by contracting with a medical debt relief coordinator.
Pennsylvanians would be eligible for relief if they have a household income at or below 400 percent of the federal poverty guidelines or medical debt equal to 5 percent or more of the individual’s household income.
“It helps to relieve medical debt and it helps to prevent it from occurring in the first place,” said Venkat of the program.
Specifically, Venkat’s bill proposes using state dollars to partner with an existing charity and purchase distressed debt- or debt that can’t be collected- from providers, like hospitals, physicians or EMS agencies. Each dollar the state spends would purchase $100 of debt.
“Because we're purchasing distressed debt, you can purchase it for pennies on the dollar,” said Venkat. “So, an appropriation of 10 to $15 million can actually purchase up to one and a half billion dollars worth of medical debt and help hundreds of thousands of Pennsylvanians. That's about as good an investment as I can imagine with state dollars,” he added.
Venkat says the debt would be forgiven and patients would be notified afterwards.
“Individuals only find out about their debt relief after the fact. So any concerns that people will say, ‘well, the state is going to pay my medical bill, I don't need to pay it,’ is alleviated because you don't know if you're going to get medical debt relief until it's already been completed,” said Venkat. “I think that's really key to why this is a market driven, fiscally responsible solution to this problem,” he added.
The House passed Venkat's bill 114-89. It now moves to the Senate for consideration.
“Through this bill, it is my hope that we can alleviate Pennsylvanians’ medical debt so that they may receive the health care they need,” said Venkat.