The Debt Disparity
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Consequences of Med Debt
The Consequences of Medical Debt Evidence from Three Communities February 2003 Comité de Apoyo de Inquilinos y Trabajadores Tenants’ and Workers’ Support Committee The Access Project (TAP) is affiliated with the Heller School for Social Policy and Management at Brandeis University. It has served as a resource center for local communities working to improve health and healthcare access since 1998. The project receives its funding from a variety of public and private sources. The mission of TAP is to strengthen community action, promote social change, and improve health, especially for those who are most vulnerable. TAP conducts community action research in conjunction with local leaders to improve the quality of relevant information needed to change the health system. It seeks to enhance the knowledge and skills of community leaders to strengthen the voice of underserved communities in the public and private policy discussions that directly affect them. 30 Winter Street, Suite 930 Boston, MA 02108 Phone: (617) 654-9911 E-mail: [email protected] Internet: www.accessproject.org The Champaign County Health Care Consumers (CCHCC), founded in 1977, is a non-profit grassroots citizen action organization dedicated to the mission of health care for all. CCHCC is founded on the premise of participatory democracy and the belief that meaningful change in the health care system will come only with the active involvement of consumers. CCHCC works to bring a consumer voice and consumer-driven changes to the health care system through education, advocacy, and community organizing. CCHCC is a community-based organization with over 7,000 members working locally on issues of national importance. -
The Loan Shark Problem in the Southeastern States
THE LOAN SHARK PROBLEM IN THE SOUTHEASTERN STATES WILLIAM HAYS SIMPSON* Because of the increase in problems associated with the business of money lending in the United States many of the states passed regulatory acts. The movement ex- tended to the Southeastern area where all states, including Alabama, Florida, Georgia, Louisiana, Mississippi, Maryland, North Carolina, South Carolina, Tennessee, Vir- ginia, and West Virginia, enacted legislation which established legal interest rates. " These rates varied slightly, with all states now limiting the annual rate to 6 per cent except Georgia and Florida where interest rates were set at 7 and 8 per cent re- spectively. While 6 per cent per annum is the maximum contract rate in Maryland, North Carolina, Tennessee, Virginia, and West Virginia, the rate in writing is 7 per cent in South Carolina, 8 in Alabama, Georgia, Louisiana, and Mississippi, and io per cent in Florida. The civil penalties imposed in actions on usurious contracts of course vary in the -different states. Louisiana law contains no provision for civil penalties but in West Virginia, Virginia, Tennessee, and Maryland forfeiture of excess over legal rate may be had through legal action while forfeiture of all interest is provided for in the laws of Alabama, Florida, Georgia, Mississippi, South Carolina, and North Carolina. The laws of the latter state also provide for the forfeiture of double interest paid on loans made on household and kitchen furniture. No criminal penalties are provided for violation of the usury laws in Alabama, Louisiana, Mississippi, Maryland, Tennessee, Virginia, and West Virginia, but in Florida, Georgia, and North Carolina it is, under various circumstances, a mis- demeanor to make usurious charges. -
A Crisis of Medical Debt Americans Owe About One Trillion Dollars in Medical Debt
A Crisis of Medical Debt Americans owe about one trillion dollars in medical debt. That’s just over $3000 for every adult and child. Each year, 79,000,000 Americans are faced with difficult choices of paying their mounting medical bills or paying for basic human Quick Facts about Medical Debt: needs like shelter and food for themselves and their families. About 66% of U.S. bankruptcy cases are related to medical debt issues, and • 42.9 million Americans have about 25% of credit card debt is medical debt. Because it is so unpaid medical bills expensive, about 50% of Americans delay going to the doctor when • Six in 10 of both insured and sick. The cost of U.S. medical care, even with insurance, is crushing uninsured people say they working and middle class families across the country. have difficulty in paying other bills as a result of medical After a period of time, overdue medical debt is sold for pennies on debt. the dollar by medical clinics and hospitals to private collection agencies, who then try to collect the full balance from the original • Medical debt contributes to debt holder. More than half of the debt collections market in the more than 60 percent of the United States is related to medical debt. This is where RIP Medical bankruptcies in the U.S. Debt comes in. They buy up medical debt for pennies on the dollar, and then instead of collecting the original balance, they erase it. It is a practice of mercy, and we can participate. Data and some text for this info sheet and for RIP Medical Debt available here: https://ripmedicaldebt.org. -
Tax Evasion, Income Inequality and Opportunity Costs of Compliance
Tax Evasion, Income Inequality and Opportunity Costs of Compliance Kim M. Bloomquist Senior Economist Internal Revenue Service Office of Research Washington, D.C. Paper presented at the 96th Annual Conference of the National Tax Association Drake Hotel Chicago, IL November, 2003 Abstract – This paper argues that widening income inequality contributes to the propensity to evade by both reducing the probability of detection and increasing compliance opportunity costs. Lower detection probability occurs as rising inequality gradually alters the composition of income from being employment-based (i.e., matchable) to investment-based (i.e., non-matchable). Greater economic polarization also increases the financial strain on many former middle-class taxpayers, thus raising their opportunity cost of compliance. In addition, the compliance opportunity costs for wealthy taxpayers also could increase if they perceive a growing exchange inequity between their tax burdens and public sector benefits. This paper tests the hypothesis that rising income inequality contributes to tax evasion in the United States. Empirical analysis for the period 1947-2000 finds a positive correlation between the underreporting rate for wage and salary income and the top decile wage share. This finding suggests that enforcement policies aimed at reducing income tax evasion may lose some effectiveness in an environment of increasing inequality. Tax Evasion, Income Inequality and Opportunity Costs of Compliance INTRODUCTION If asked to identify a single indicator that best described the overall condition of the U.S. economy in recent decades, a measure of income inequality would likely be among the top candidates. A recent study by Piketty and Saez (2001) finds that between 1970 and 2000 the share of income (not including capital gains) reported by the top decile of U.S. -
Past-Due Medical Debt Among Nonelderly Adults, 2012–15
HEALTH POLICY CENTER AND OPPORTUNITY AND OWNERSHIP INITIATIVE Past-Due Medical Debt among Nonelderly Adults, 2012–15 Michael Karpman and Kyle J. Caswell March 2017 Medical bills contribute to financial insecurity for many Americans. In this brief, we use survey data to examine the prevalence of past-due medical debt among nonelderly adults—specifically, how it varies across states, and how it has changed over time. We find that states differ substantially in the share of nonelderly adults reporting that they have unpaid medical bills that are past due. Many Americans carry past-due medical debt balances. A recent Consumer Financial Protection Bureau report found that unpaid debt in collections owed to hospitals and other medical providers made up about half of all debt in collections, and that 19 percent of consumers with a credit file had some form of medical debt in collections (CFPB 2014). Families with medical debt report that it reduces their ability to save and to afford basic household needs, increases their reliance on credit cards and other forms of debt, damages their credit, and induces them to forgo needed health care (Hamel et al. 2016; Pollitz et al. 2014). In extreme cases, medical debt may contribute to personal bankruptcy, although the extent to which medical bills cause bankruptcy is debated (Dobkin et al. 2016; Dranove and Millenson 2006; Gross and Notowidigdo 2011; Himmelstein et al. 2005). A fundamental function of health insurance is to protect people against the risk of unexpected medical bills, and several studies have found that health insurance reduces medical debt as well as other forms of debt. -
SOLVING the MEDICAL DEBT CRISIS Brianna Wells | March 2021 TABLE of CONTENTS
SOLVING THE MEDICAL DEBT CRISIS Brianna Wells | March 2021 TABLE OF CONTENTS Executive Summary 2 Introduction 4 Medical Debt and Racial Health & Economic Disparities 5 Findings: Causes of Medical Debt 8 - Surprise Medical Billing - Medical Credit Cards - Third-Party Debt Collection - Uninsurance and Underinsurance - Credit Inequities Health Care Costs Due to COVID-19 and Medical Debt 11 Policy Recommendations 12 - Institutionalize Equity into Health Systems - Institutionalize Equity into Financial Institutions - State Government Policies Conclusion 15 Acknowledgements 16 References 18 The Greenlining Institute Solving the Medical Debt Crisis 1 EXECUTIVE SUMMARY Medical debt is the number one cause of • In California, 31% of people of color have bankruptcy in the United States, with 62% of some type of past-due debt in collections, bankruptcies caused by medical bills.1 In 2016, compared to only 19% of White residents. one in six Americans had past due medical bills, • Twelve percent of people from communities of resulting in $81 billion in debt.2 color in California owe medical debt.6 In a 2015 survey by the Kaiser Family Foundation, The COVID-19 pandemic threatens to worsen 26% of Americans aged 18 to 64—52 million— health disparities and the burden of medical debt said that they struggled to pay medical bills.3 on communities of color. Health care costs due Medical expenses were the largest factor to COVID-19 have already left people in severe increasing the number of people in poverty last debt, and layoffs due to COVID leave historical year.4 numbers of people unemployed and uninsured.7 Communities of color have been especially Medical debt is not distributed equally across devastated by the pandemic, leaving them communities: especially vulnerable. -
Stopping the Payday Loan Trap Alternatives That Work, Ones That Don’T
Stopping the payday Loan trap AlternAtives thAt Work, ones thAt Don’t NCLC® NATIONAL CONSUMER June 2010 L AW C E N T E R® © Copyright 2010, National Consumer Law Center, Inc. All rights reserved. About the Authors Lauren K. Saunders is the Managing Attorney of NCLC’s Washington, DC office, where she handles legislative, administrative and other advocacy efforts on behalf of low income consumers. She contributes to several NCLC publications, including Fair Credit Reporting, Fair Debt Collection and Consumer Banking and Payments Law. She graduated magna cum laude from Harvard Law School where she was an Executive Editor of the Harvard Law Review, and holds a Masters in Public Policy from Harvard’s Kennedy School of Government and a B.A., Phi Beta Kappa, from Stanford University. Leah A. Plunkett is a staff attorney at NCLC, where she focuses on predatory small dollar loans, auto policy, protection of exempt funds, and the consumer needs of domestic violence survivors. Before coming to NCLC, Leah clerked in the United States District Court for the District of Maryland and established the Youth Law Project at New Hampshire Legal Assistance. Leah is a cum laude graduate of Harvard Law School, where she was on the board of both the Harvard Legal Aid Bureau and HLS for Choice. Carolyn Carter is NCLC’s Deputy Director for Advocacy. She is a contributing author to Cost of Credit, Truth in Lending, Unfair and Deceptive Acts and Practices and several other NCLC treatises. Prior to joining NCLC, she worked for legal services programs in Ohio and Pennsylvania. -
Fair Debt Collection Practices Act
Fair Debt Collection Practices Act CFPB Annual Report 2017 1 March 2017 Message from Richard Cordray Director of the CFPB The year 2017 marks the fortieth anniversary of the enactment of the Fair Debt Collection Practices Act (“FDCPA”). In enacting that law, Congress found “abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors” and enacted the law to put an end to such practices and assure “that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged.” Much has changed in the ensuing forty years in the ways in which debt is collected and even in the types of entities engaged in debt collection. But the Act remains as important today as it was the day that it was signed into law. The Consumer Financial Protection Bureau (“Bureau” or “CFPB”) is the only federal government agency dedicated solely to consumer financial protection. Among our important responsibilities is administering and enforcing the FDCPA. We recognize that debt collection is a necessary part of a functioning financial system. At the same time, we recognize that illegal practices have no place in the debt collection process, and that if such practices are not stopped, those collectors seeking to adhere to the law will find themselves at a competitive disadvantage. It is therefore vitally important that the protections built into the FDCPA are vigorously enforced. The Bureau is authorized to do so along with our partners at the Federal Trade Commission (“FTC”). In 2016, the Bureau and the FTC took important steps to vindicate the rights set forth in the FDCPA. -
Healthcare Debt in the United States: an Analysis of Consumer Healthcare Debt and Its Impact on Healthcare Systems
Title Page Healthcare Debt in the United States: An Analysis of Consumer Healthcare Debt and Its Impact on Healthcare Systems by Sydney Elizabeth Pack BS in Business Administration, University of Arkansas, 2011 Submitted to the Graduate Faculty of the Department of Health Policy and Management Graduate School of Public Health in partial fulfillment of the requirements for the degree of Master of Health Administration University of Pittsburgh 2020 Committee Page UNIVERSITY OF PITTSBURGH GRADUATE SCHOOL OF PUBLIC HEALTH This essay is submitted by Sydney Elizabeth Pack on June 22, 2020 and approved by Essay Advisor: Kevin Broom, PhD, MBA, Associate Professor and Director of MHA and MHA/MBA Programs, Health Policy and Management, Graduate School of Public Health, University of Pittsburgh Essay Reader: Sara Goodkind, PhD, MSW, Associate Professor, School of Social Work, University of Pittsburgh Essay Reader: Jeffery Shook, PhD, MSW, JD, Associate Professor, School of Social Work, University of Pittsburgh ii Copyright © by Sydney Elizabeth Pack 2020 iii Abstract Kevin Broom, PhD Healthcare Debt in the United States: An Analysis of Consumer Healthcare Debt and Its Impact on Healthcare Systems Sydney Elizabeth Pack, MHA University of Pittsburgh, 2020 Abstract Healthcare debt in the United States (US) has become an economic and public health issue that continues to place a financial strain on individuals and healthcare systems. More policies could be enacted to assist individuals bearing the financial burden of healthcare debt. There are a number of ways to receive assistance in paying for healthcare debt, but none of the current solutions are consistent or sustainable in the long-term. -
Testimony in Support of Payday Loan Reform: Informational Hearing
Testimony in Support of Payday Loan Reform: Informational Hearing House Financial Institutions and Pensions Kansas Catholic Conference: Jeanette Pryor, Policy Specialist Monday, February 17, 2020 Chairman Kelly and Members of the Committee, “In Imitation of Our Master, we Christians are asked to confront the poverty of our brothers and sisters, to touch it, to make it our own and to take practical steps to alleviate it.” (Pope Francis) My name is Jeanette Pryor and I am the Policy Specialist for the Kansas Catholic Conference. I represent the four Catholic Bishops of Kansas and their dioceses. On their behalf, I would like to express our gratitude for this opportunity to offer information concerning financial products sold in Kansas that we believe contribute to destabilization of family financial health and the overall destabilization of the family. The family is the building block and foundation of all human society. It has always been at the heart of the Church’s pastoral mission. For this reason, everything that impacts the spiritual, mental and physical wellbeing of families is of deep concern for the Catholic Bishops of Kansas. Family financial stability has the potential, for better or worse, to deeply impact each of those critical three facets of family life and health. We believe current payday loan industry practices unfairly target the financially vulnerable in times of crisis. For many years, the Catholic Bishops of Kansas have fought this often-lonely campaign to inform legislators and urge them to engage in effective legislative action that would, at least, bring some improvements to this industry. The Kansas Legislator Briefing Book states: “The Kansas Legislature began its review of payday lending during the 1991 Session.” In fact, our State Library contains a hand-typed report prepared for the Committee on Small Loan Interest Rates of the Kansas Legislative Council. -
Medical Debt As a Cause of Consumer Bankruptcy
Maine Law Review Volume 67 Number 1 Article 2 January 2014 Medical Debt as a Cause of Consumer Bankruptcy Daniel A. Austin Follow this and additional works at: https://digitalcommons.mainelaw.maine.edu/mlr Part of the Health Law and Policy Commons Recommended Citation Daniel A. Austin, Medical Debt as a Cause of Consumer Bankruptcy, 67 Me. L. Rev. 1 (2014). Available at: https://digitalcommons.mainelaw.maine.edu/mlr/vol67/iss1/2 This Article is brought to you for free and open access by the Journals at University of Maine School of Law Digital Commons. It has been accepted for inclusion in Maine Law Review by an authorized editor of University of Maine School of Law Digital Commons. For more information, please contact [email protected]. MEDICAL DEBT AS A CAUSE OF CONSUMER BANKRUPTCY Daniel A. Austin I. INTRODUCTION II. BANKRUPTCY AND MEDICAL BANKRUPTCIES A. Consumer Bankruptcy: Overview and Causes 1. Overview of Consumer Bankruptcy 2. Causes of Consumer Bankruptcy B. Medical Bankruptcy C. Medical Debt as a Cause of Bankruptcy III. SOURCES OF DATA AND METHODOLOGY A. Bankruptcy Schedules B. Surveys IV. FINDINGS A. Medical Debt is the Single Largest Cause of Consumer Bankruptcy. B. Twenty-Six Percent of Debtors “Agree” or “Strongly Agree” That They Filed Because of Medical Bills. C. Sixty-One Percent of Debtors Report Medical Debt and Average Medical Debt is $9,374.09 D. Eighteen Percent of Debtors Have Revised Medical Debt Greater Than Half of Their Annual Income or Total Unsecured Debt V. CONCLUSION 2 MAINE LAW REVIEW [Vol. 67:1 MEDICAL DEBT AS A CAUSE OF CONSUMER BANKRUPTCY Daniel A. -
Payday Loans: Shrewd Business Or Predatory Lending? Creola Johnson
University of Minnesota Law School Scholarship Repository Minnesota Law Review 2002 Payday Loans: Shrewd Business or Predatory Lending? Creola Johnson Follow this and additional works at: https://scholarship.law.umn.edu/mlr Part of the Law Commons Recommended Citation Johnson, Creola, "Payday Loans: Shrewd Business or Predatory Lending?" (2002). Minnesota Law Review. 744. https://scholarship.law.umn.edu/mlr/744 This Article is brought to you for free and open access by the University of Minnesota Law School. It has been accepted for inclusion in Minnesota Law Review collection by an authorized administrator of the Scholarship Repository. For more information, please contact [email protected]. Payday Loans: Shrewd Business or Predatory Lending? Creola Johnsont I. The Nature of Payday Lending .......................................... 8 A. What Are Payday Loans and Who Uses Them? . 9 B. Payday Loans: Ordinary Check-Cashing Services or Lending M oney? ................................ ......................... 12 1. Payday Loans Are Covered by the Truth in Lending Act ........................................................... 13 2. Disguising Payday Loans Through Sham Transactions ........................................................... 18 II. Criticisms of the Payday Loan Industry .......................... 25 A. Unfair and Unlawful Practices Before or At Contract Form ation ................................................... 26 1. The Cost of Payday Lending: Triple-Digit Interest Rates ........................................................