Your Money or Your Life
"The catastrophic problems which cause families to file for bankruptcy are not properly addressed by imposing greater requirements on people trying to get a fresh start," adds Ralph Mabey, co-chair of the legislation committee for the National Bankruptcy Conference, a national collective of bankruptcy experts that opposes the legislation.
Medical debtors, as the Health Affairs study shows, are suffering real hardship, which makes it hard to believe they are simply shirking their obligations and freeloading off the system, as Republican rhetoric suggests. In the two years before filing, 22 percent of families in the study went without food, 30 percent had a utility shut off, 61 percent went without important medical care and half failed to fill a doctor's prescription.
"The bill is written against a template that everyone has overspent, including those with breast cancer, those fighting chronic illness, those who have lost children to cystic fibrosis or other terrible illnesses," says Warren. "It's like responding to a cholera outbreak by closing down the hospitals."
Whatever happens politically, the fate of medical debtors will also be shaped by several cases now winding through the courts. Last summer, law firms filed numerous lawsuits against nonprofit hospitals for overcharging uninsured patients, a practice that often contributes to bankruptcy. Attorney Richard Scruggs, who headed government lawsuits against big tobacco companies, is leading the federal effort.
On the state level, a class-action suit is pending in Illinois that involves Advocate, the source of Rose Shaffer's troubles. In November 2003 seven former patients filed the suit, charging Advocate with imposing discriminatory pricing (the number has since risen to seventeen). There is ample evidence for their claims. In March 2003 the Service Employees International Union, the nation's largest healthcare union and an adversary of Advocate in organizing campaigns, released a study on the collection practices of fifty-nine Cook County hospitals. Advocate, which operates six hospitals in the county, ranked worst. According to SEIU, Advocate charged uninsured patients 139 percent more than their insured counterparts and was three times as likely to sue as other local hospitals. A month after the report's release, Advocate announced an increase in charity care for patients who couldn't pay. But for Rose Shaffer and others, it was too late. Later that year SEIU and Barack Obama brought Shaffer to Springfield to tell her story to the State Assembly.
"Advocate fails to provide automatic charity care discounts to the poor, and as a result the uninsured are still victimized by aggressive pricing and collections tactics," says Joseph Geevarghese, director of SEIU's Hospital Accountability Project. Advocate, which says it offers among the nation's most generous charity care, filed a motion to dismiss and a counterclaim against SEIU, accusing the union of defamation. The motion was denied last November, but Advocate plans on refiling. The lawsuit will likely be tried this year.
Still, University of North Carolina associate law professor Melissa Jacoby, who testified before Congress last summer on how hospital collection practices can cause bankruptcy, doesn't think litigation on its own will right the system. "Hospitals with the most egregious practices certainly should clean up their acts," she says, "but millions of people will still experience medical-related financial problems and their consequences, including debt collection and bankruptcy."