Minnesota Debt Fairness Act to Help Consumers Struggling with Medical Debt

Katy Drahos, access to justice director at the Minnesota State Bar Association (MSBA), spoke at a February 9th press conference about the Bar’s Consumer Debt Litigation Report alongside Governor Tim Walz, Attorney General Keith Ellison, legislators, and Minnesotans affected by the burden of unfair medical debt. The press conference was held to preview medical debt solution proposals, notably the Minnesota Debt Fairness Act discussed by AG Ellison. If passed, the Act would address medical debt, wage garnishment and collections, and would include unique provisions for medical debt. It would ban the denial of medical care based on outstanding patient debt, repeal the current law allowing transfer of medical debt to a patient’s spouse, ban charging interest on medical debt and reporting it to credit bureaus, and more.

Ellison shared that the impetus for the proposed bill was the MSBA’s Consumer Debt Litigation Report, and the stark picture it painted of how broken debt collection policies are in Minnesota. Drahos spoke on behalf of the Bar’s access to justice committee and explained how the group regularly looks at the biggest gaps in representation in the court system. They found that consumer debt litigation always rises to the top. Consumers rarely have representation in these cases and Drahos emphasized that the report’s data revealed over half of all civil cases in Minnesota are consumer debt cases. Medical debt is included in these cases.

KARE 11 news also spoke with Drahos who noted that debt collection cases are filed against Black and Latino Minnesotans at double the rate of white Minnesotans. Families in lower income areas are also more likely to be taken to court for debt and that the number of cases is probably higher than it appears because of the way the debt is handled and paid. "That debt has been sold to collectors, or individuals put medical debt on their credit cards and then default on those cards, or they prioritize paying their medical bills at the cost of other debts they owe,” Drahos said.