Gov. Murphy signs “Louisa Carman Medical Debt Relief Act”
Protects New Jerseyans from Falling into Medical Debt
NEW JERSEY – Governor Phil Murphy Monday signed the Louisa Carman Medical Debt Relief Act which will help New Jersey families avoid falling into medical debt and protect individuals from predatory medical debt collectors.
The Louisa Carman Medical Debt Relief Act is named in honor of a member of the Governor’s Office who helped craft the proposal before tragically passing away in a car accident on New Year’s Day at the age of 25.
Joined by Louisa’s family and advocates, the Governor signed the bill, advancing his Administration’s efforts to make New Jersey’s health care system more accessible and more affordable for more people.
“With this legislation, we honor Louisa by carrying forward her mission to ensure every New Jerseyan can access the health care they deserve without breaking the bank,” Murphy said. “The Louisa Carman Medical Debt Relief Act is a monumental step toward building a health care system that is more affordable and more accessible for families all across New Jersey. And it will always stand as a testament to the indispensable role Louisa played in transforming our health care system for the better, so we can protect all of our neighbors from being forced to choose between seeking potentially life-saving care or falling into a medical debt trap.”
“Louisa was a valued, brilliant, and talented member of our team who dedicated every day to bettering our health care system and the lives of New Jerseyans across the state,” said Lieutenant Governor Tahesha Way. “This legislation comes at a critical time where more than one in ten people in New Jersey, and even more in our Black and Brown communities, have medical debt in collections. This Louisa Carman Medical Debt Relief Act would not exist without her passion and advocacy and it will help thousands of families access the care they need and deserve without fear of financial ruin.”
“Louisa joined the Governor’s Office of Health Care Affordability and Transparency in the fall of 2021, and immediately set herself apart as a quick learner and fierce advocate for our most vulnerable neighbors,” said the Bradlow Carman Family. “She inspired her colleagues — as well as her friends and family members — to adopt her passion for combatting predatory medical debt collection and ending the indignity of medical debt. We thank Governor Murphy, the bill sponsors, as well as the advocates who ensured that this legislation would be a meaningful and lasting testament to Louisa’s heart, brilliance, and passion for fighting for families struggling with medical debt.”
“Louisa will be remembered as a young, bright, passionate public servant who cared deeply about policy making to improve people’s lives,” said Shabnam Salih, Director of the Office of Health Care Affordability. “Her work gave us the foundation for the critical consumer protections against medical debt provided through this legislation and her work will live on to help so many individuals and their families to be less burdened by the crushing impact of medical debt.”
This bill prohibits a medical creditor or medical debt collector from reporting a patient’s medical debt to any consumer reporting agency for health care services performed on or after the effective date of the bill.
Further, the legislation prohibits a medical creditor or medical debt collector from:
(1) Making a consumer report containing a patient’s paid medical debt or a medical debt worth less than $500, regardless of the date the medical debt was incurred;
(2) Charging an interest rate on a medical debt of more than three percent per year;
(3) Garnishing the wages of a patient with an annual income of less than 600 percent of the federal poverty level to collect medical debt owed by that patient; or
(4) Engaging in any collection actions against a patient until 120 days after the first bill for a medical debt has been sent or against a patient who accepts and complies with the terms of a reasonable payment plan.
Collection actions include selling the patient’s debt to another party, placing a lien on the patient’s property, attaching or seizing the patient’s bank accounts, and garnishing the patient’s wages.
The bill also provides certain protections to patients with medical debt from collection actions by medical creditors and medical debt collectors and provides that any portion of a medical debt furnished to a consumer reporting agency in violation of the bill will be void.
Lastly, the bill provides a medical creditor or medical debt collector that violates a provision of the bill may be subject to a civil penalty and may be ordered by the Attorney General to restore to interested parties any moneys or property acquired by means in violation of the bill.
Primary sponsors of the A3681/S2806 include Senators Shirley K. Turner and M. Teresa Ruiz, and Assemblymembers Verlina Reynolds-Jackson, Wayne P. DeAngelo, Anthony S. Verrelli, and Herb Conaway Jr.
