Medical Debt Should Not Exist

Medical Debt in America

The healthcare system in America systematically pushes many people into debt, causing suffering and sacrifices for patients and their families. The scope and severity of the crisis is staggering. The emotional trauma and financial damage are unconscionable. This needs to change.

  • The United States has by far the highest cost for medical care and prescription drugs in the world.

  • Patients often get hit with catastrophic surprise medical bills from doctors not in their insurance network. And the uninsured are billed for arbitrary amounts far in excess of what the hospital would accept from insurance providers.

  • Millions of people are struggling to pay medical bills and face relentless harassment by debt collectors.

  • An entire industry has been created to buy medical debt for pennies on the dollar. They then go after patients and demand payment of the the full amount of the debt, plus interest and attorney fees.

  • Creditors (even many nonprofit hospitals) often file a lawsuit to collect medical debt that people can’t pay. Most people, however, are not represented by an attorney. So the creditor gets a default judgment and then can garnish wages or attach other property. Unfortunately, filing bankruptcy is often inevitable, a tragic result that should never happen.

  • Many people forgo medical care, can’t afford prescriptions and are unable to pay other living expenses, often incurring other debt as a result.

Medical Industrial Complex

Why is medical care so costly? We have a corporate medical industrial complex that is driven by profit. Health care has become big business.

Health care lobbyists spend incredible amounts to influence legislation that favors special interests. Large hospital systems, health insurance companies, pharmaceutical companies and private equity firms are reaping billions of dollars in profits, stock buybacks and executive compensation. As a result, the United States spends dramatically more on health care than other developed continents. They are driven by greed. This needs to stop.

In most countries medical debt doesn’t exist. It’s a foreign concept. And medical debt shouldn’t exist in America.

Medical Debt Protection Act

A Medical Debt Protection Act is needed to protect people who can’t pay their medical bills from collection action and lawsuits. We need to stop:

  • Hospitals from charging an uninsured in excess of 250% of the amount that Medicare would pay.

  • Hospitals from engaging in balance billing.  If a hospital is in network under an insurance plan, all providers at the hospital will be deemed to be in network under the plan for insurance and billing purposes.

  • Attachment or garnishment of wages, self employment income, social security or other government benefits, a car needed for work, a principal residence or property used in a trade or business to pay medical debt.

  • Debt collectors from filing a lawsuit to collect a medical bill without an affidavit from the provider that verifies the balance due is correct, and collection is not barred by the statute of limitations. 

  • Filing an action to collect a medical bill more than three year after the medical services are provided.

  • Notifying any credit reporting agency of any medical debt.   

  • Insurance companies from denying pre authorization requests or coverage of procedures, treatments or drugs recommended by a physician without an independent review by a qualified professional.

Law Clinic

A Medical Debt Law Clinic is needed to represent people who have been sued to collect medical debt they can’t pay.

The Medical Debt Law Clinic will provide legal defense to individuals who are sued to collect medical debt. The goal is to ensure that no one loses wages, property, or financial stability simply because they were unable afford an attorney to respond to a lawsuit.

Our Mission

Medical debt collection lawsuits frequently result in default judgments because defendants do not understand the legal process or cannot afford legal representation. By filing answers, asserting defenses, and requiring proof of claims, the Clinic promotes fairness, accuracy, and accountability in the court system.

What We Do

  • Interview clients and review medical billing records

  • Evaluate potential defenses, including statute of limitations, standing, billing accuracy, and financial assistance eligibility

  • Prepare pleadings and legal filings

  • Provide representation in court through volunteer attorneys

  • Assist in negotiating fair settlements when appropriate

The Clinic intends to use a collaborative model. Initial intake, document review, and case preparation are handled centrally. Volunteer attorneys serve as counsel of record, review filings, and appear in court. This structure allows the Clinic to maximize impact while minimizing costs.

Access to Services

The Clinic operates on an ability-to-pay contribution model, asking clients to contribute toward program costs if they are financially able. No person is denied representation due to inability to pay.

The Importance of Legal Defense

Medical debt lawsuits often rely on high default rates, often 90% or more, because most people are never represented by an attorney. So the creditor gets a default judgment and can then garnish wages of attach other property. Unfortunately, the person too often ends up filing bankruptcy.

When defendants are represented, many cases, especially for smaller medical bills, will be dismissed or because the cost of pursuing the claim is not justified by the potential recovery. And weak or unsupported cases are frequently dismissed or resolved on fair terms based on what the person can actually pay.

Code Blue Foundation

A Community Solution to Medical Debt and Unaffordable Healthcare

  • The strategy will be to encourage businesses and individuals to join a groundbreaking initiativeto reduce the burden of unaffordable healthcare and medical debt. The vision is to begin by creating a foundation in Boise, Idaho and then expand to other communities.

  • The Code Blue Foundation will be funded by voluntary contributions from local businesses, foundations and individuals. Services will include:

    • Help paying medical debt.

    • Purchase of medical debt and then forgiving the debt.

    • Providing deductible and copay assistance.

    • Making emergency grants to help with insurance companies failing to provide prior authorizations or denials of coverage.

    • Distribute funds through an application process to identify those in need and ensure an equitable disbursement of funds.

  •  The foundation will be a 501(c)(3) charitable organization. Contributions will be tax deductible. The foundation will be managed by a diverse board of directors representing businesses, healthcare providers and patients.