Growing Concerns Over Medical Debt Leading to Jail Time
by Kevin Bliss
Watchdog organizations are becoming concerned with medical costs and collections due to practices such as balanced billing and debt collections court, where thousands of dollars of unexpected medical expenses overwhelm patients, and those who fail to pay must submit to periodic court hearings or find themselves facing jail for contempt.
According to Oklahoma Deputy Insurance Commissioner Mike Rhoads, medical insurers are limiting in-network providers to reduce costs. This means a patient may undergo treatment expecting to pay no more than their deductible, but the insurance agency reevaluates their costs due to an out-of-network care provider, charging the patient more for something outside their control. For example, Eric McDermott of Yukon, Oklahoma was billed $7,300 after reevaluation of an emergency appendectomy for his daughter. His original estimate was $500.
Federal legislation to stop surprise medical billing has been stalled in Congress at a time when studies show that out-of-network expenses for emergency room visits increased 11 percent over the past five years and 16 percent for inpatient visits. Costs for an average emergency room visit after insurance increased $408, and inpatient visits rose $1,236. A study conducted by the Commonwealth Fund in 2018 found that less than half the working-age adults surveyed could cover a $1,000 medical bill within a 30-day time period.
Lizzie Presser, a reporter for the nonprofit news agency ProPublica, wrote that thousands of people are jailed each year due to these unpaid medical bills. Debt collectors working for insurance agencies in jurisdictions with cooperative judges force debtors to come to court every three months for “debt exams” to review their finances. The collector then determines if they can garnish wages, attach liens, set up payment plans or apply other options that may be available to collect the money owed. The debtor has the choice of losing a day’s wages to answer the same questions over and over in court, or be jailed for contempt if they fail to appear – which may occur if they don’t receive notice of a court date or that a suit has been filed against them.
Debt collectors like Michael Hassenplug, an attorney in Coffeeville, Kansas, receive one-third of what they collect, and this fee is not deducted from the total amount owed or the annual 12 percent interest attached to the debt. Moreover, Judge David Casement – a cattle rancher who was appointed magistrate judge for the county after completing a self-study Internet course – told Presser that he allowed debt collectors to decide who were issued warrants for contempt. Presser said the judge also adopted a policy of a $50 plaintiff’s attorney fee or a two-day jail sentence for any defendants missing two debt exams, to ease Hassenplug’s fears that defendants were purposely missing every other exam only to avoid contempt charges.
Advocates for reform say that using contempt charges as a means of debt collection raises constitutional questions. Presser reported that within the last year, at least 11 people in Coffeeville were jailed as a result of unpaid medical bills. Debt collection is an $11 billion a year industry, and court systems are flooded by lawsuits trying to be the first to collect on any assets a debtor may have. Most states prohibit the use of contempt charges for unpaid debt unless it can be proven the defendant has the ability to pay. Yet in places like Coffeeville, a cattle rancher without any legal background can determine the application of law, even if it violates defendants’ rights.
“I don’t know whether the Legislature intended it to be used this way or not [contempt warrants]. I have not had enough pushback from the defendants’ side to give me the impression that I’m really abusing this badly,” Judge Casement stated.
Nor is this problem limited to Kansas; an October 2019 feature article by ProPublica, authored by Presser, cited examples in other states.
“In Indiana, a cancer patient was hauled away from home in her pajamas in front of her three children; too weak to climb the stairs to the women’s area of the jail, she spent the night in a men’s mental health unit where an inmate smeared feces on the wall,” the article stated. “In Utah, a man who had ignored orders to appear over an unpaid ambulance bill told friends he would rather die than go to jail; the day he was arrested, he snuck poison into the cell and ended his life.”
Sources: features.propublica.org, benefitspro.com, oklahomawatch.org
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