Eva Stahl, vice president of policy and programs for the advocacy group Undue Medical Debt, said an estimated one in five residents have medical debt in collections. She added that over the past few years, many states have been moving to fill in consumer protection gaps but Kentucky continues to lack policy standards for financial assistance or hospital repayment plans.
"Putting guardrails around payment plans and protecting people, making sure that doors are open around financial assistance at hospitals, with respect to medical debt on credit reports," Stahl urged.
Kentucky does not set medical debt interest or wage garnishment limits. Earlier this month, a federal judge in Texas ruled medical debt can remain on Americans' credit reports, reversing a Biden administration rule barring medical debt from affecting credit scores. The three national credit reporting agencies announced last year they would erase medical collections under $500 from credit reports.
Stahl pointed out states have been taking action to curb the harms of medical debt on credit reports, recognizing even a few hundred dollars in medical debt can disrupt lives by forcing households to use up emergency savings or cut back on basic needs like food and clothing.
"Because they're hearing from their residents and their voters that this is something that's burdensome," Stahl explained.
The majority of people said they accrued debt from a single hospital stay or treatment for an accident and nearly 30% of adults said they owe debt entirely for hospital bills, according to data from the Commonwealth Fund.