Medical debt from hospital and doctor visits is driving millions of Americans into financial distress—and Colorado is no exception. A recent study led by Stanford Medicine calls medical debt itself a public health crisis: about 100 million Americans carry medical debt, nearly 60 percent of personal bankruptcies are linked to medical expenses, and more than one in three adults delay or avoid care out of fear of unpredictable costs. When hospitals sue patients over unpaid bills, the consequences are severe – patients skip future care, experience food insecurity, and suffer extreme financial stress.

In Colorado, many hospitals aggressively pursue medical debt through the courts. These lawsuits often add thousands of dollars in hospital attorneys’ fees and court costs to bills patients could not afford in the first place. In fiscal year 2024 alone, thousands of medical debt collection lawsuits were filed against Colorado patients. And the harm doesn’t end with a court judgment. Hospitals and their collection agencies garnish wages, place liens on homes, initiate foreclosures, and seize money directly from patients’ bank accounts.

Most people burdened by medical debt are not irresponsible or unwilling to pay. Medical bills commonly arise from emergencies or unexpected illnesses. People fall behind because they lack the financial means to pay—not because they lack the desire to meet their obligations. Turning medical crises into legal battles only deepens the damage, forcing families to choose between paying medical bills or paying for rent, groceries, medicine, and future medical care.

Perhaps most troubling is that the largest medical debt collector in Colorado is UCHealth, a nonprofit healthcare system generating billions of dollars in annual revenue from hospitals and clinics across Colorado, Wyoming, and western Nebraska. As a nonprofit, UCHealth is exempt from paying federal and state income taxes and from property taxes, and donations to it are tax-deductible. In other words, it contributes no tax revenue to public services such as schools, police, or fire departments—yet aggressively sues patients for money stemming from the care it provides.

Between 2018 and 2019, UCHealth reportedly sued more than 5,500 of its own patients. Beginning in 2020, it relied on a private collection agency to carry out its legal collection efforts. Between 2019 and 2023, UCHealth and its contractor filed more than 12,700 lawsuits, resulting in $33.5 million in judgments. More than one-third of those cases sought garnishment of wages or bank accounts. 95 percent of these lawsuits were filed under seal, shielding UCHealth’s role from public view.

UCHealth is not alone. Other Colorado hospitals, including other nonprofit hospitals like Children’s Hospital Colorado, reportedly also sue patients for medical debt, though not at the same scale. Some hospitals choose not to sue their patients after providing medical care.

Informed by real-life stories from patients and health care workers across the state, Colorado lawmakers are taking a serious look at the problem. The Medical Debt Protection Act will be introduced soon in the Colorado General Assembly by Representatives Javier Mabrey and Junie Joseph and Senators Mike Weissman and Iman Jodeh. The bill would establish basic, common-sense safeguards for patients:

·      Creditors must send a 30-day notice using two means of communication before collection or debt sale, including a plain language explanation of the debt, the final amount the patient is liable to pay, and an offer of a reasonable payment plan.

·      Health-care providers must offer reasonable payment plans capped at 4% of monthly household income. Plans must be flexible, offer a 60-day grace period, and include at least four installments.

·     Creditors are prohibited from extreme actions, including foreclosure on a primary home, wage garnishment, bank account seizure (unless the seizure leaves a minimum of $30,000 in accounts, and a judge issues a specific order allowing the limited seizure), and threats of or actions towards deportation or arrest.

·      Creditors are prohibited from asserting a lien on, attaching, seizing, or even threatening to seize funds from retirement accounts, pension funds, and educational savings funds. It also extends to savings programs designed for individuals with disabilities, ensuring these essential financial resources remain untouched by debt collection actions.

The legislation is supported by several highly respected nonprofit organizations, including the Center for Health Progress, the Colorado Consumer Health Initiative, the Colorado Center on Law and Policy, and Towards Justice.

Colorado residents should contact their legislators and urge them to support the Medical Debt Protection Act. They can also support the nonprofit organizations working hard to pass these protections.

This effort recognizes a simple truth: medical care should heal people, not impoverish them. Every Coloradan deserves access to health care without fear that getting sick will lead to wage garnishment, emptied bank accounts, or the loss of their home. This bill is a crucial step toward ensuring that illness does not become a lifelong financial sentence.