Senate Bill 23-093 does four main things:
- It caps interest rates on medical bills.
- It requires more price transparency for people who plan to pay out of pocket.
- It pauses debt collection on bills that are being disputed.
- It gives the Colorado Attorney General’s office additional tools to go after predatory practices.
“The policy we’re proposing caps the medical debt interest rate at 3%, which will give folks an opportunity to get their arms around debt they may incur without seeing the bill skyrocket out of control,” said Sen. Lisa Cutter, D-Littleton.
Beyond that, the bill requires debt collectors to provide an itemized statement explaining the medical debt upon request. It also establishes requirements for payment plans for medical debt.
“It’s worth noting in terms of debt collection that is on consumer credit reports 58% that are currently being filed are now medical bills,” said Attorney General Phil Weiser.
According to the Kaiser Family Foundation, four in 10 adults currently have medical or dental debt in the U.S. at the moment. Of those, half owe at least $2,500 while 12% owe more than $10,000. Coloradans currently owe more than $1.3 billion in medical debt.
“More than 66% of all bankruptcies in the US were tied to medical costs. Communities of Color disproportionately bear the brunt of the burden of this debt. Nearly one in three Black, Indigenous, People of Color in Colorado are estimated to have unpaid medical bills, which is almost double the rate of their white Coloradan counterparts,” said Isabel Cruz from the Colorado Consumer Health Initiative.
The bill has the backing of AARP, the Colorado Center on Law and Policy, the Colorado Cross Disability Coalition and Weiser among others.
“We have to protect people protect families who are facing a crushing burden where they feel they may never get out from under it,” said Weiser.
During a press conference Tuesday, Sharon Cravitz shared her medical bill story. She was diagnosed with an aggressive form of breast cancer in 2018. She credits the hard work of the medical team with her survival but says that even while being treated she started seeing the bills come in.
Luckily she had some savings and was able to pay most of the bills but there was one strange debt call she received nine months into her treatment asking for $2,000.
“I was worn out physically. I was worn out emotionally. There were a lot of bills. It was confusing. I just wanted to be done,” Cravitz said. “I promptly called the phone number. And was told that the most I would say was $93.50, but they needed my help to collect what was rightfully owed for the full amount.”
The company told her they wanted her to write a letter to the Colorado Department of Regulatory Agencies to complain that her insurance wouldn’t pay the rest of the bill. When she started doing research into the company, the law the claim her insurance company was violating and the bill itself, she started questioning whether it was a real bill at all.
Still, month after month she was receiving the same threatening letters.
“Almost a year later, I received a letter from a debt collection agency saying, ‘Times are tough. We will work with you. You owe this $1,700 … plus interest within 30 days, or we will report you to the debt to the credit agencies,’” said Cravitz.
Eventually, she was able to send the company enough documentation to prove the bill was incorrect. However, the situation was overwhelming and stressful at a time she should have been focusing on healing.
She said keeping the trail of documents was key and she hopes this legislation will protect other consumers like herself.
“I was thinking about other women that might have had a double mastectomy for breast cancer there were now being victimized and being forced to pay bills on top of legitimate bills,” she said.
The Emergency Medical Services Association of Colorado is the only group officially opposing the legislation at the moment.
Others like Kaiser Permanente and the Colorado Hospital Association are in an amended position.
EMSAC told Denver7 in a phone call the bill would be detrimental to emergency services because they are a high-cost service provider but also a public good that must be provided regardless of a patient’s ability to pay.
Tim Dienst, the administrative coordinator for the association, says EMS services are already some of the last to be paid from insurance companies and roughly 70% of their calls come from Medicare and Medicaid patients.
He worries that a cap would make it impossible for EMS services to overcome the cost burdens of running their services. He also considers this an unfunded mandate that will hurt EMS services.
He also worries about the part of the legislation that requires a cost estimate to be provided to patients paying out of pocket, saying ambulatory services don’t carry that financial information with them when responding to emergency calls.
He would like to see emergency services exempted from the bill. Cutter says she’s looking into those concerns to see whether an amendment is needed for the bill.