State temporarily halts wage garnishing for UK medical bills. It should be a permanent stop.
By Linda Blackford
Gov. Andy Beshear’s administration says it has stopped a harmful and possibly unlawful practice of garnishing the wages of thousands of low-income Kentuckians with tardy medical bills from University of Kentucky HealthCare.
Jill Midkiff, spokeswoman for the Finance and Administration Cabinet said that in mid-March, the Department of Revenue had released levies on wages accrued from debt at UK. A 2004 law expanded the revenue department’s collection powers, allowing UK HealthCare to use the department as a collection agency. Only, unlike collection agencies, Revenue does not have to get a court judgment to begin garnishing wages before property liens and other governmental maneuvers can be applied. The department also adds 25 percent as a collection fee.
The practice should have been suspended two years ago, when it became the subject of two different lawsuits brought by Lexington attorney Doug Richards. He’s trying to get class action status on one of the suits because he says it has unfairly affected as many 30,000 people in the Commonwealth.
But Richards is not convinced the practice has stopped. He was recently contacted by Debra Hinkle, who works as a customer service rep in London. A few weeks ago, she received an email from the payroll department saying that the Department of Revenue is garnishing her wages for an unpaid bill at UK from 2012 that’s now at $36,000, thanks to 32 percent interest. The only thing she can remember is being treated for snakebite in 2012, but she’s never received any bills from UK, and late or unpaid bills never showed up on her credit report.
“I’ve only lived two places in my entire life and I’ve never heard anything about this,” Hinkle said. “And now, you can’t reach anyone to talk about it.”
Since I first wrote about this issue two years ago, I’ve been contacted by numerous people in the same predicament, and Hinkle’s story is a familiar one. Many of the affected people, already living on the margins, say these notices show up out of the blue with medical bills they didn’t know they had.
UK says referring debt to Revenue is a last resort after numerous letters and phone calls have been made to try to collect.
“I’ll believe it when I see it,” Richards said of the announcement. “I haven’t seen anything that suggests they’ve stopped doing this. I wish they would say, let’s stop this until it’s played out in court.”
Midkiff said that Revenue has also released all state claims and all driver’s license and vehicle registration revocations. If a taxpayer, individual or business calls to report that they cannot make their installment payments due to the COVID-19 emergency, payments will be put on hold for three months.
This practice disproportionately affects Kentucky’s most vulnerable citizens, many of whom did not have healthcare at the time. A lot more people have lost healthcare in the past few weeks when they lost their jobs. The pandemic has shown us any number of societal disparities, and healthcare is a major one.
Let’s stop using the state as a collection agency while we’re in crisis mode, and let the courts decide if it should ever start up again.