Two Monmouth County lawmakers want to alleviate the impact of medical debt and provide more options for paying potentially costly bills.
Under Assembly Bill 4335, health care providers would have more requirements before they can refer outstanding debts to collection agencies.
They would also be required to provide the option of income-based repayment plans and deferrals for payments in the event of a permanent disability.
The debt would be discharged in the event of death or a permanent total disability, which the legislation defines as being “unable to work and earn money because of an injury or illness that is expected to continue indefinitely or result in death.”
The law was sponsored by Assemblywoman Joann Downey and Assemblyman Eric Houghtaling, both D-11th District, and referred to the Assembly Consumer Affairs Committee on Aug. 27.
“Medical bills should not consume someone’s life,” Houghtaling said. “It is only fair that patients are provided with feasible methods to pay off their debt.”
Patients would have 90 days after the bill was issued before a health care facility can send the debt to a collection agency. And even before the 90-day mark, the provider has to make the option available for the patient to make monthly payments that don’t exceed 15 percent of their discretionary income.
Health care facilities couldn’t refer the debt to collection agencies if the patient is compliant with their payment plan, which counts as at least 11 payments during a 12-month period.
And even then, if the patient misses a payment, the facility would instead be required to coordinate a way to make up for the missed payment.
“This will be a win for concerned patients across New Jersey,” Downey said. “No longer will residents have to fear paying exorbitant medical bills in an expedited fashion; they will be able to make payments that make financial sense for them.”