Maine Legislature splits on bills designed to rein in burden of medical debt

Seeking to address what has become a pressing issue for nearly half of Mainers, several bills were introduced this session to combat medical debt. 

However, the Maine Legislature split on the measures, approving one but sinking another. 

Data shows medical debt plagues many across the state. Four in ten Mainers have taken on medical debt in the last five years and three out of four of those people still have that debt, according to a survey from Consumers for Affordable Health Care earlier this year. In addition, the survey showed that half of Mainers find it challenging to afford health care and that two-thirds would have difficulty paying a $500 medical expense. Across the country, nearly 100 million people have unpaid medical bills, according to the White House. 

In response to such issues, Senate President Troy Jackson (D-Aroostook) and Sen. Mike Tipping (D-Penobscot) unveiled legislation earlier this year to begin addressing the problem. 

Tipping’s bill, LD 2115, was passed by the Legislature last week. It received unanimous consent from both the House and Senate. 

As amended, the bill would ban agencies from charging interest on debt or fees in relation to medical debt collection. The bill further stipulates that a collector cannot sue for repayment of medical debt unless they have: provided the consumer with at least 30 days to prove that their income isn’t more than 300% of the federal poverty line and shown that they notified the consumer that a lawsuit can’t be pursued when the collector knows the consumer’s income isn’t more than 300% of the federal poverty line. 

Finally, LD 2115 would prevent debt agencies from making false, deceptive or misleading representations when attempting to collect on medical debt. 

As originally drafted, the measure sought to ban a provider from selling a person’s medical debt to a collector for less than the total amount of the debt unless the provider had already offered the person the chance to buy their debt at the same reduced price — an issue that has emerged because Tipping said agencies often purchase people’s medical debt for pennies on the dollar. 

Senate president’s bill fails between chambers 

Jackson’s bill, LD 2174, passed the Senate 24-10 last week but ran into problems in the House, where it was defeated by a 91-55 vote. Republicans voted against the measure while Democrats were split on the bill. The bill ultimately died Monday because the chambers failed to agree on whether to pass it, even after the Senate pared back the measure.  

As originally passed by the Senate, LD 2174 would have banned reporting agencies from including medical debt on a consumer’s credit report and prohibited providers in a treatment setting from creating an application for “open-end credit” or for a loan that contains a deferred interest provision — or doing so on a consumer’s behalf. Open-end credit essentially means a loan that a person can get money from repeatedly, up to a certain amount. 

The measure would have also prohibited health care entities from accepting open-end credit or a loan containing deferred interest provisions prior to when services are provided, except when advance payment is required for a lower price. And the bill would have barred providers from advertising open-end credit or a loan as having a zero interest rate if it has a deferred interest provision unless that provision is clearly disclosed and educational materials are provided. 

Deferred interest allows consumers to avoid paying interest for a certain period on bills or expenses. But as Maine Morning Star previously reported, after the introductory period ends, interest rates can shoot up, sometimes creating more debt for consumers. 

In an apparent effort to come to a compromise, the Senate amended the bill last week after it failed in the House, scaling it back. The amended version sought to bar reporting medical debt incurred for necessary procedures on a person’s consumer report but removed the rest of the measure’s provisions. 

However, the House still opposed the bill and it ultimately failed Monday night because of the divide between the two chambers. 

The bill was the subject of a vigorous debate last week when the House took up the original version that the Senate passed. 

One opponent of the measure was Rep. Gregory Swallow (R-Houlton), who said he heard from lots of Mainers who find deferred interest payment arrangements for medical services to be a useful tool.   

“I received emails from many of them, including the elderly, who were begging me not to make any changes, who find this to be very beneficial and asked that we just don’t change anything,” he said. “This has helped a lot of people.”  

However, Rep. Cheryl Golek (D-Harpswell), a supporter of the bill, said the measure wouldn’t ban those payment arrangements but would simply create common-sense consumer protections.  

Golek added that medical debt often stems from people needing emergency care, and she told her own story of having medical debt appear on her credit report. The effect was that she struggled to find secure housing for her family. 

“We have an opportunity with this bill to make a dent in unfair reporting practices of medical debt,” Golek told her fellow lawmakers.