Minnesota medical debt protections kick in, shielding some consumers from collectors, as legal clinic is held

State Attorney General Keith Ellison encouraged Minnesotans to take advantage of a free legal clinic on Saturday that can advise them of their protections from consumer and medical debts, including new protections that became law this week.

Under the law that took effect Tuesday, Minnesotans can no longer have their overdue medical debts reported to credit rating agencies, and unpaid medical bills do not automatically transfer to a spouse, even after a death. Providers also can’t deny care to patients based on the fact that they owe overdue debts.

While those protections will spare Minnesotans from “unfair and undignified” collection practices, Ellison said, people still ultimately need to confront their debts. Saturday’s legal clinic from 10 a.m. to 5 p.m. at NorthPoint Health and Wellness Center in Minneapolis is one way they can learn their best options for negotiating settlements or even shielding their assets by filing bankruptcy.

People might feel shame over medical debts, even if they were caused by diseases beyond their control, but ignoring them can increase financial and emotional burdens, Ellison said. “It’s not going to get better if you just let them bills accumulate and you just get more stressed out about it.”

Hospitals and clinics took different approaches when it came to denial of care for patients with overdue bills. Media coverage of this practice by Allina Health prompted the legislation by DFL lawmakers, along with a report showing how many lawsuits in state district court involved consumer or medical debt.

Sen. Liz Boldon, DFL-Rochester, said she coauthored the legislation based on hardship stories she heard from Minnesotans, including a parent whose child was at risk of losing access to care for a degenerative and potentially blinding eye disorder because of medical debts.

“Nobody is asking for a free ride,” she said. “They’re asking for a fair shot.”

While creditors can no longer sue spouses over partners’ overdue medical debts, Ellison said it is unclear what the law will do to existing lawsuits. Judges may have to decide in those cases whether to remove spouses as defendants, he said.

The threat of lawsuits in some cases had resulted in partners divorcing spouses to shield them from debts.

The attorney general’s office already had a voluntary agreement with hospitals that banned reporting patients’ overdue medical bills to collection agencies. The new law expands the ban to clinics and other providers.

The law also reduces the amount that can be garnished under court order from the wages of people with overdue debts whose income puts them just above the poverty line. However, that protection is scheduled to go into effect next spring.