In a move to support New Jersey families, Governor Phil Murphy signed the Louisa Carman Medical Debt Relief Act into law. This new legislation aims to help families avoid falling into medical debt and protect them from aggressive debt collectors. The act is named in honor of Louisa Carman, a dedicated member of the Governor’s Office who played a crucial role in crafting the proposal before her tragic death in a car accident at age 25.
Governor Murphy was joined by Louisa’s family and healthcare advocates as he signed the bill, underscoring his administration’s commitment to making healthcare more affordable and accessible for everyone in New Jersey.
“By enacting this law, we honor Louisa’s mission to make healthcare accessible without financial ruin,” said Governor Murphy. “This act represents a significant step towards a more affordable healthcare system and will always stand as a testament to Louisa’s invaluable contributions.”
Key Points of the Louisa Carman Medical Debt Relief Act
The Louisa Carman Medical Debt Relief Act includes several key provisions designed to protect patients from the financial strain of medical debt:
Prohibition on Reporting Medical Debt:
- Medical creditors cannot report a patient’s medical debt to consumer reporting agencies for healthcare services performed after the bill’s effective date.
- Paid medical debt or medical debt under $500 cannot be reported, regardless of when it was incurred.
Interest Rate Cap:
- Medical creditors cannot charge an interest rate exceeding 3% per year on medical debt.
Restrictions on Wage Garnishment:
- Wages cannot be garnished for medical debt if the patient’s annual income is below 600% of the federal poverty level.
Delay in Collection Actions:
- Collection actions cannot begin until 120 days after the first bill is sent.
- Collection actions are prohibited against patients who accept and comply with a reasonable payment plan.
Prohibited Collection Actions:
- Selling the patient’s debt to another party.
- Placing liens on the patient’s property.
- Attaching or seizing the patient’s bank accounts.
- Garnishing the patient’s wages.
Legal Protections and Penalties:
- Any portion of a medical debt reported in violation of the bill will be considered void.
- Medical creditors or debt collectors violating the bill may face civil penalties and could be required to restore any money or property obtained through violations.
Lieutenant Governor Tahesha Way emphasized the urgency of this legislation, noting that more than one in ten New Jersey residents, especially in Black and Brown communities, have medical debt in collections. She praised Louisa’s dedication to bettering the healthcare system and highlighted how this law will help thousands of families access necessary care without the fear of financial disaster.
Louisa Carman joined the Governor’s Office of Health Care Affordability and Transparency in 2021 and quickly became a passionate advocate against predatory medical debt collection. Her family expressed their gratitude for the meaningful legislation that ensures Louisa’s legacy continues to protect families struggling with medical debt.
Supporting Statements from Key Figures
Primary sponsors of the bill include Senators Shirley K. Turner and M. Teresa Ruiz, and Assemblymembers Verlina Reynolds-Jackson, Wayne P. DeAngelo, Anthony S. Verrelli, and Herb Conaway Jr.
Senator Shirley Turner highlighted the bill’s potential to improve financial stability for individuals and families by removing medical debt from credit reports. Senator Teresa Ruiz noted the disproportionate impact of medical debt on low-income areas and communities of color, emphasizing that no one should have to choose between health and financial stability.
Assemblywoman Verlina Reynolds-Jackson, Assemblyman Anthony Verrelli, and Assemblyman Wayne DeAngelo all stressed the importance of this legislation in easing the financial burden on New Jersey families, allowing them to focus on healing rather than debt.
Advocates like Laura Waddell from New Jersey Citizen Action and Renée Steinhagen from New Jersey Appleseed Public Interest Law Center praised the law for preventing medical debt from ruining credit scores and providing significant consumer protections. Health organizations, including the New Jersey Hospital Association and the Leukemia & Lymphoma Society, supported the act for its role in reducing financial barriers to healthcare.
Conclusion
The Louisa Carman Medical Debt Relief Act represents a crucial step in protecting New Jersey families from the overwhelming burden of medical debt, ensuring that everyone can access the care they need without financial hardship. This law not only honors Louisa Carman’s legacy but also provides lasting protections for thousands of New Jersey residents, making healthcare more affordable and accessible for all.
Author: Jennifer Evancic
Jennifer.Evancic@ResourceManagement.com
Jennifer Evancic is a third-party auditor valued by creditors and large organizations for her knowledge in call monitoring within the collections industry. With meticulous attention to detail and a firm grasp of regulatory requirements, she ensures compliance with clients’ criteria and state and federal regulations.
Jennifer audits collections calls, ensuring they meet client-specific criteria and comply with regulations, providing valuable insights and maintaining industry standards.
Beyond her auditing responsibilities, Jennifer takes the lead in organizing and facilitating monthly call calibrations. These sessions serve as a collaborative forum where clients and their vendors come together to discuss call monitoring results and address any findings or areas for improvement. Jennifer’s guidance fosters open communication and ensures alignment between clients and vendors, driving continuous improvement in collections practices.
Jennifer stays up-to-date with compliance and industry best practices by participating regularly in peer meetings, regulatory updates and industry webinars. This keeps her informed about emerging issues and ensures she remains a knowledgeable leader in collections compliance.
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