Last Wednesday, New York Governor Kathy Hochul signed a bill into law — which went into effect immediately — that prohibits healthcare providers from placing lines on the primary residences of individuals with unpaid medical debts or garnishing wages to collect on unpaid bills.
The state legislature in New York passed the bills — S6522A/A7363A — earlier this year. Community groups and consumer advocacies had been lobbying the legislature and the governor hard to enact the law, arguing that inflation is making it harder for residents of The Empire State to make ends meet and losing wages to garnishments does nothing but exacerbate the problem.
The newly enacted law prohibits nonprofit hospitals and healthcare providers from imposing and enforcing liens on a patient’s primary residence to satisfy judgments in medical debt lawsuits. It also prohibits nonprofit hospitals and healthcare providers from securing wage garnishments to satisfy judgments in medical debt lawsuits.
“No one should face the threat of losing their home or falling into further debt after seeking medical care,” Gov. Hochul said, in a statement. “I’m proud to sign legislation today that will end this harmful and predatory collection practice to help protect New Yorkers from these unfair penalties. With medical debt a burden for far too many, this is an important step to address this crucial issue.”
A report issued by one group sampled wage garnishments at five New York nonprofit hospitals, which filed more than 12,000 lawsuits between 2015 and 2020. That total accounted for 23% of all hospital lawsuits brought during that span. Sampling 1,600 garnishments from those cases, the report concluded that 24% of indebted patients worked in healthcare and social service agencies, 20% worked in manufacturing, and 15% worked in retail.
