Workers' Wages Continue to Be Garnished to Pay Off Medical Debt

"Stacey Knoll thought the court summons she received was a scam. She didn't remember getting any medical bills from Montrose Regional Health, a nonprofit hospital, after a 2020 emergency room visit. So she was shocked when, three years after the trip to the hospital, her employer received court orders requiring it to start funneling a chunk of her paychecks to a debt collector for an unpaid $881 medical bill - which had grown to $1,155.26 from interest and court fees. The timing was terrible. After leaving a bad marriage and staying in a shelter, she had just gotten full custody of her three children, steady housing in Montrose, Colorado, and a job at a gas station. "And that's when I got that garnishment from the court," she said. "It was really scary. I'd never been on my own or raised kids on my own.""

"KFF Health News reviewed 1,200 Colorado cases in which judges, over a two-year period from Feb. 1, 2022, through Feb. 1, 2024, gave permission to garnish wages over unpaid bills. At least 30% of the cases stemmed from medical care - even when patients' bills should have been covered by Medicaid, the public insurance program for those with low incomes or disabilities. That 30% is likely an underestimate since medical debt is often hidden behind other types of debt, such as from credit cards or payday loans. But even that minimum would translate to roughly 14,000 cases a year in Colorado in which courts approved taking people's wages because of unpaid medical bills."

Colorado judges approved wage garnishments for numerous unpaid debts during a two-year period, with a substantial share tied to medical bills. At least 30% of reviewed cases stemmed from medical care, and that share likely understates the problem because medical debt is often hidden behind other debt types. Medical bills pursued ranged from under $30 to over $30,000, with most under $2,400, and legal fees and interest frequently increased balances by about 25%. Providers across the system supported collection actions, and individual patients experiencing garnishment faced severe financial strain.

Read at Truthout