Proposed ballot measure would place new limits on medical debt collectors | Recent news

Kim Crooks’ voice quivers with outrage as she recalls how debt collectors treated her after her husband died of a brain tumor, leaving her with $250,000 in unpaid medical bills.

The high-pressure phone calls began weeks after the funeral, she said.

“I don’t think he’s even been dead a month,” said Crooks, 66, a retired University of Arizona administrator and widow for more than a decade.

“Some of them were downright mean. They threatened to put liens on my house. My bank accounts were frozen.

Crooks said she learned she was not alone when she joined a bereavement support group. Harassment by medical collectors “was a common topic,” in the four years she dated, she said.

Crooks said she was able to hire a lawyer to cut the total bill in half and pay most of it with her retirement savings, leaving a hole in her nest egg. But many people don’t have those options, she added.

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These days, Crooks is collecting signatures and sharing her story to encourage public support for a proposed ballot measure backed by Democrats, unions and social welfare groups, but opposed by one of the biggest business organizations. of the region.

The Tucson Metro Chamber, which represents 1,500 businesses in Tucson and Pima County, said many Arizonans may struggle to access credit if the proposal lands on the ballot and is approved by voters.

Asset Protection

A recent federal Consumer Financial Protection Bureau report said 16% to 20% of Arizonans had credit records with medical debt in collection as of December 2020.

The proposed “Predatory Debt Collection Act” would allow people with medical debt to protect more of their assets from creditors than current state law allows.

For example, a home worth up to $400,000 would be exempt, up 60% from the current exemption level of $250,000. The value of household assets protected from creditors would increase from $6,000 to $15,000.

The measure would also protect a vehicle worth up to $15,000 instead of $6,000 and allow a debtor to keep up to $5,000 in the bank instead of the current $300.

In addition, the proposal calls for a 3% interest rate on medical debt.

The ballot measure is offered by a group called Healthcare Rising Arizona, a membership organization that pushes for better health and wellness. “No family in Arizona should be bankrupted by the cost of (medical) care,” its website said.

Healthcare Rising Arizona proposed a different ballot initiative in 2020 that would have raised the pay of some workers at medical facilities and also banned surprise billing by healthcare companies. The effort failed when critics sued and a judge ruled that the petition’s statement was misleading and that some of the signatures were invalid.

This year’s ballot measure has the support of several southern Arizona community groups, including the YWCA of Southern Arizona, the Southwest Conference of United Churches, the Southern Arizona AIDS Foundation and the Southwest Fair Housing Council.

Anticipated “negative impact”

The Tucson Metro Chamber recently issued a press release warning of the negative consequences and asking local residents not to sign petitions seeking to put the measure on the November ballot.

The petitions state in the first sentence that the initiative targets “medical debt” and that the measure “does not change existing law regarding secured debt.”

Even so, House President and CEO Michael Guymon said the proposal includes language that could apply to any debtor, not just medical debtors.

The chamber’s financial analysis found that anyone earning less than $50,000 a year would effectively be exempt from paying creditors, which would “limit access to credit for the Arizona community.”

“If a lender can’t collect the unpaid debts of a person who earns $50,000, why would he lend to him? said Guymon.

“This will negatively impact business owners, lenders, and the overall financial ecosystem in Arizona.”

Healthcare Rising Arizona must collect 237,645 valid signatures to be on the ballot. The deadline for filing signatures with state election officials is July 8.

Contact reporter Carol Ann Alaimo at 573-4138 or [email protected] On Twitter: @AZStarConsumer