Dealing with a serious illness is even more challenging when it comes with a large medical bill. Oftentimes just one medical emergency can create a financial crisis. For most people the amount due is nearly impossible to pay all at once.
The Peterson Center on Healthcare and KFF reports 7.6% of Minnesota residents have medical debt. The American Cancer Society polled cancer survivors in 2024 and found that 47% carried medical debt related to their cancer treatment.
Help has arrived. In 2024, Minnesota passed the Debt Fairness Act (MDFA), bringing protection to consumers from unfair debt collection practices, especially for medical debt. The law was signed in June and key provisions went into effect on October 1, 2024.
The MDFA:
· Bans reporting medical debt to credit bureaus.
· Bans health care providers from withholding medically necessary care due to unpaid debt.
· Eliminates the automatic transfer of medical debt to a patient’s spouse.
· Requires healthcare providers to publish their medical debt collection practices.
· Establishes a new process for patients to dispute coding or billing errors.
· Requires the payment of attorney fees for patients who successfully defend medical debt collection lawsuits.
Minnesota medical providers and debt collectors are already reducing or writing off claim balances due to the ban on spousal debt transfers or in furtherance of charity care requirements.
The MDFA also prohibits certain debt collection practices. Debt collectors –
· cannot use robocalls to collect debt;
· cannot threaten to withhold medical services if payment is not made;
· cannot contact third parties about the debt; and
· must notify patients of their right to hire an attorney or contact the Minnesota Attorney General regarding the debt.
There are also provisions in the MDFA that improve bankruptcy protections, and on April 1, 2025, new income-based limits on wage garnishment will take effect.
What can you do about medical debt?
Spousal debt- If a medical provider or debt collector is sending you bills or trying to collect money from you for your spouse’s medical debt (even if your spouse has passed away), contact the medical provider or debt collector and tell them that you are not responsible for payment according to the Minnesota Debt Fairness Act.
Ask about financial assistance - In Minnesota, hospitals are required to screen patients for financial assistance eligibility before sending them to collections, but this does not always happen. Be proactive and ask your medical provider about it before paying any bills. You can also go to DollarFor.org for help applying.
Negotiate a payment plan – If you aren’t eligible for financial assistance, talk to your medical provider about interest-free payments. Doing so proactively can prevent the debt from going to collection.
Do NOT use a credit card to pay medical debt.
Type of debt – paying medical debt with a credit card converts the type of debt from medical debt to credit card debt. The MDFA has many protections against medical debt, but those protections do not apply as soon as the debt is converted from medical debt to credit card debt.
Interest - Credit card debt can accumulate interest, usually at high rates. Medical debt accrues little or no interest.
Credit score - Late payments on credit cards can be reported to credit bureaus, which can hurt your credit score. Under the MDFA, medical debt cannot be reported to credit agencies.
Financial assistance - Using a credit card to pay medical debt may make it harder to get financial assistance from your medical provider. It is better to apply for financial assistance before you consider paying the bill with a credit card or other method.
Cancer Legal Care is proud to have supported passage of the MDFA on behalf of our clients and others in the Minnesota cancer community - we believe that medical debt has no place in burdening anyone’s cancer journey.
To learn more, contact Cancer Legal Care at 651-917-9000 or help@cancerlegalcare.org.
