Sen. Tipping law to address medical debt takes effect
AUGUSTA — On Friday, August 9, a law from Sen. Mike Tipping, D-Orono, went into effect. LD 2115, “An Act Requiring Health Care Providers to Engage in Fair Practices When Selling Medical Debt,” prohibits medical debt collectors from charging any interest on debt or fees in connection with the collection of debt that the debt collector knows is medical debt.
“Nearly every family in Maine has been affected by medical debt. It’s something no one can anticipate or prepare for and it can be a difficult burden to bear,” said Sen. Tipping. “I’m very glad for the support this groundbreaking policy received and proud that Mainers can no longer be charged fees or interest or sued over their health care debt.”
According to Consumers for Affordable Health Care, 100 million American adults have medical debt, totaling $195 billion in 2019. In Maine, 42 percent of households have carried medical debt at some point. Of that 42 percent, nearly all still have the debt.
The law also prohibits debt collectors from pursuing litigation to compel payment of medical debt without providing proof that the consumer was sent a written notice indicating that litigation may not be pursued when:
- The debt collector or collection agency knows the consumer’s household income is not more than 300% of the federal poverty guidelines;
- The debt collector or collection agency provided the consumer with at least 30 days to provide evidence that the consumer’s household income is not more than 300% of the federal poverty guidelines.
Additionally, it prohibits debt collectors from making false, deceptive or misleading representations. This prohibition applies when the collectors attempt to collect debt that the debt collector or collection agency knows is medical debt.
Finally, it applies when the collectors try to obtain information about a consumer in relation to an attempt to collect medical debt that interest will accumulate on the debt principal, that a fee will be charged in connect with the debt, or that the debt collector will pursue litigation to compel payment of the debt.
The law went into effect on August 9, 2024.
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