Debt Reform

HB 694, sponsored by Del. Lorig Charkoudian, requires Maryland hospitals, the Comptroller, and state agencies to develop a process to identify and reimburse patients that qualified for free hospital care but were wrongfully charged and pursued by debt collectors. This legislation was prompted by an HSCRC report, required under legislation that MCRC led in 2020, which found that low-income patients paid Maryland hospitals $120 million in 2017-2018 on top of the money hospitals received from the state. The legislation will identify and refund patients from 2017-2021 and will return an estimated $200 million to low-income patients. This is the first bill of this kind to pass in the country.

HB565/SB514, sponsored by Del. Lorig Charkoudian & Sen. Brian Feldman, curb some of the worst practices of hospitals pursuing working families for medical debt. This legislation will require Maryland hospitals to provide an annual report each year detailing the debts they are pursuing through collections and lawsuits, extend the timeline to apply for free or reduced-cost care, require hospitals to refund patients who were pursued for collection and should have received free-care, bans wage garnishment for patients who qualify for free or reduced cost care, bans liens on a patient’s home for medical debt, establishes a workgroup to develop income-based repayment plans for all patients with unaffordable medical debt with monthly payments of no more than 5% of their gross monthly wages, and creates a moratorium on all lawsuits until hospitals have adopted and implemented an income-based repayment plan. This legislation is the first in the country to adopt many of these provisions and in other areas has passed the strongest protections in the country. The Medical Debt Protection Act extends critically needed protections to the more than 927,000 Maryland families that qualify for free or reduced cost care.

HB1420/SB875, sponsored by Del. Robbyn Lewis & Sen. Brian Feldman, expand financial assistance policies so more households can receive free and discounted care at hospitals across the state. The legislation expands eligibility for free or discounted hospital care to households between 200-500% of the federal poverty guidelines; requires that hospitals provide more expansive notice of financial assistance policies and ensures that those notices are clear, accessible, and in a patient’s preferred language; reduces duplicative processes to apply for financial assistance policies; and expands protections for patients through the Maryland Consumer Protection Act. This legislation assists the more than 25% of Maryland households who struggle financially and may now be eligible for discounted hospital care.

HB365/SB425, sponsored by Del. Kathleen Dumais & Del. Lorig Charkoudian and Sen. Pam Beidle, allow working families to protect more of their wages from garnishment for the first time in 30 years.  Because the increase in wage protection is pegged to the state’s minimum wage, the amount protected from garnishment will increase each year until 2025 when Maryland reaches its $15 per year minimum wage and low-wage workers will be able to protect $450 per week or $23,400 per year. This legislation will help a number of the 573,000 minimum wage workers in Maryland who may fall behind on their bills during the economic downturn predicted from the COVID-19 virus.

SB 527,  sponsored by Sen. Middleton, closes a loophole in our state’s payday lending laws. This bill ensures that Maryland will remain a member of  PaydayFreeLandia (aka the 16 states in the U.S. that have reasonable interest rate caps) and protects Maryland consumers from predatory payday lenders. Whenever payday lenders try to gain re-entrance into our state, we activate our networks to fight back and keep them from offering high-interest, debt trap loans to low-income Maryland consumers.