On July 11, Jennifer Holloway, an Equal Justice Works Medical Debt Fellow at Tzedek DC, participated with the Consumer Financial Protection Bureau (CFPB), the National Consumer Law Center, Community Catalyst, and the Colorado Center on Law and Policy in a panel discussion with CFPB Director Rohit Chopra on the issue of medical debt and challenges faced by Americans when using certain high-interest and deferred-interest medical payment products. More than 100 million Americans owe medical debt, and Americans have paid more than $1 billion in deferred interest on medical credit cards, potentially on medical care that rightfully should have been covered by their insurance or offered at a reduced rate via charity care through the provider.
Medical debt is both the largest category of debt in collections in the United States and the leading cause of bankruptcy, and community members of color in DC are, on average, 300 percent more likely than white residents to be burdened by medical debt. Medical debt not only impacts nearly one in three Americans financially but also affects their future ability to see a physician and receive healthcare. Medical debt can reduce credit scores, increasing the difficulty of renting an apartment, purchasing a vehicle, or even getting a job.
Jennifer, who leads Tzedek DC’s medical debt project, shared the challenges her DC resident clients have managing both their medical debt and their ongoing health and financial needs: “Clients can feel pressured into opening medical credit cards and are often unaware of the high rate of deferred interest, leading to bills that are much higher than anticipated and that they are unable to afford.”
The CFPB, along with the U.S. Department of Health and Human Services and the U.S. Treasury, are seeking to understand more about medical billing and collections and the impacts medical payment products have on patients. These federal agencies are interested in a deeper understanding of the specialty medical payment product market, patient experiences and downstream consequences, billing and financial assistance issues, and healthcare provider incentives for offering such payment products.
Comments are open on the Request for Information until September 11, 2023.
About Tzedek DC
Tzedek DC’s name is drawn from the ancient Jewish teaching “Tzedek, tzedek tirdof, or “Justice, justice you shall pursue.” Headquartered at the University of the District of Columbia David A. Clarke School of Law, Tzedek DC’s mission is to safeguard the legal rights and financial health of DC residents with lower incomes facing the often-devastating consequences of debt collection and credit-related obstacles. This mission is carried out as anti-racism work in response to the massive wealth gaps tracking race in DC and nationwide. Tzedek DC seeks to serve and empower its client base, which is comprised of 90% Black residents, 60% women, and 25% disabled community members. Our strategic approach combines three synergistic activities: (i) free direct services—legal representation and advice, and financial counseling; (ii) working in coalition to make systemic change; and (iii) providing bilingual community legal education on debt collection, identity theft, and credit management. Since 2017, Tzedek DC has served over 3,000 client households in legal matters and catalyzed systemic reforms benefiting hundreds of thousands of DC residents.