The timing was terrible. After leaving a bad marriage and staying in a shelter, she had just gotten full custody of her three children, steady housing in Montrose, Colorado, and a job at a gas station.<\/p>\n
\u201cAnd that\u2019s when I got that garnishment from the court,\u201d she said. \u201cIt was really scary. I\u2019d never been on my own or raised kids on my own.\u201d<\/p>\n
KFF Health News reviewed 1,200 Colorado cases in which judges, over a two-year period from Feb. 1, 2022, through Feb. 1, 2024, gave permission to garnish wages over unpaid bills. At least 30% of the cases stemmed from medical care \u2014 even when patients\u2019 bills should have been covered by Medicaid, the public insurance program for those with low incomes or disabilities. That 30% is likely an underestimate since medical debt is often hidden<\/a> behind other types of debt, such as from credit cards or payday loans. But even that minimum would translate to roughly 14,000 cases a year in Colorado in which courts approved taking people\u2019s wages because of unpaid medical bills.<\/p>\n Among the other findings:<\/p>\n Colorado has company. It is one of 45 states that allow wage garnishment for unpaid medical bills. Only Delaware, New York, North Carolina, Pennsylvania, and Texas have banned wage garnishment for medical debt.<\/p>\n As KFF Health News has reported<\/a>, medical debt is devastating for millions of people across the country. And now the problem is likely to grow more pressing nationwide. Millions of Americans are expected to lose health insurance in the coming years due to Medicaid changes in President Donald Trump\u2019s tax and spending law and if Congress allows<\/a> some Affordable Care Act subsidies to expire. That means health crises for the newly uninsured<\/a> could lead them, too, into a spiral of medical debt.<\/p>\n And the hurt will linger: Large unpaid medical bills are staying on credit reports<\/a> in most states after a July decision from a federal judge<\/a> reversed a new rule aimed at protecting consumers.<\/p>\n \u201cIf you can’t maintain your health, how are you going to work to pay back a debt?\u201d said Adam Fox<\/a>, deputy director of the Colorado Consumer Health Initiative, a nonprofit aimed at lowering health costs. \u201cAnd if you fundamentally can’t pay the bill, wage garnishment isn’t going to help you do that. It’s going to put you in more financial distress.\u201d<\/p>\n Flying Blind on Medical Debt<\/strong><\/p>\n When someone fails to pay a bill, the creditor that provided the service \u2014 whether for a garage door repair, a car loan, or medical care \u2014 can take the debtor to court. Creditors can also pass the debt to a debt collector or debt buyer, who can do the same.<\/p>\n \u201cAt any given point, about 1% of working adults are being garnished for some reason,\u201d said Anthony DeFusco<\/a>, an economist at the University of Wisconsin-Madison, who studied paycheck data from ADP, a payroll processor that distributes paychecks to about a fifth of private sector U.S. workers. \u201cThat’s a big chunk of the population.\u201d<\/p>\n But specific research into the practice of garnishing wages over medical debt is scant. Studies in North Carolina<\/a>, Virginia<\/a>, and New York<\/a> have found that nonprofit hospitals commonly garnish wages from indebted patients, with some studies finding those patients tend to work in low-wage occupations.<\/p>\n Marty Makary, who led research on medical debt wage garnishment in Virginia at Johns Hopkins University before joining Trump\u2019s cabinet as Food and Drug Administration commissioner, has called the practice \u201caggressive.\u201d<\/a> He co-authored a study that found 36% of Virginia hospitals, mostly nonprofit and mostly in urban areas, were using garnishment to collect unpaid debts in 2017, affecting thousands of patients.<\/p>\n The Colorado findings from KFF Health News show that hospitals are far from the only medical providers going after patients\u2019 paychecks, though.<\/p>\n Researchers and advocates say that, in addition to a dearth of court case data, another phenomenon tends to obscure how often this happens. \u201cPeople find debt shameful,\u201d said Lester Bird, a senior manager at the Pew Charitable Trusts<\/a> who specializes in courts. \u201cA lot of this exists in the shadows.\u201d<\/p>\n Without data on how often this tactic is employed, lawmakers are flying blind \u2014 even as a 2024 Associated Press-NORC poll showed<\/a> about 4 in 5 U.S. adults believe it\u2019s important for the federal government to provide medical debt relief.<\/p>\n \u2018Blood From a Turnip\u2019<\/strong><\/p>\n Colorado was among the first<\/a> of 15 states <\/a>to scratch medical debt from credit reports. Debt buyers in the state aren\u2019t allowed to foreclose on a patient\u2019s home. If qualified patients opt to pay in monthly installments, those payments shouldn\u2019t exceed 6% of their household income \u2014 and the remaining debt gets wiped after about three years of paying.<\/p>\n But if they don\u2019t agree to a payment plan, Coloradans can have up to 20%<\/a> of their disposable earnings garnished. The National Consumer Law Center gave the state a \u201cD\u201d grade<\/a> for state protections of family finances.<\/p>\n Consumer advocates said they aren\u2019t sure how well even those Colorado requirements are being followed. And people wrote letters to the courts saying wage garnishment would exacerbate their already dire financial situations.<\/p>\n \u201cI have begun to fall behind on my electricity, my gas, my water my credit cards,\u201d wrote a man in western Colorado in a letter<\/a> to a judge that KFF Health News obtained in the court filings. Court records show he was working in construction and at a rent-to-own store, with about $8,000 in medical debt. He wrote to the judge that he was paying close to $1,000 a month. \u201cThe way things are going now I will lose everything.\u201d<\/p>\n The people being sued in KFF Health News\u2019 Colorado review worked in a wide array of jobs. They worked in school districts, ranching, mining, construction, local government, even health care. Several worked at stores such as Walmart and Family Dollar, or at gas stations, restaurants, or grocery stores.<\/p>\n \u201cYou’re really kicking people when they’re down,\u201d said Lois Lupica, a former attorney working with the Denver-based Community Economic Defense Project<\/a> and the Debt Collection Lab at Princeton. \u201cThey’re basically suing the you-can’t-get-blood-from-a-turnip population.\u201d<\/p>\n In 2022, court records show, Valley View health system based in Glenwood Springs was allowed to garnish the wages of one of its patients over a $400 medical bill. The patient was working at a local organization that the health system supported<\/a> as part of the community benefits it provides to keep its tax-exempt status. Nonprofit hospitals like Valley View are required to provide community benefits, which can also include charity care that covers patients\u2019 bills.<\/p>\n Stacey Gavrell<\/a>, the health system\u2019s chief community relations officer, said it offers options such as interest-free payment plans and care at reduced or no cost to families with incomes up to 500% of the federal poverty level.<\/p>\n \u201cAs our rural region\u2019s largest healthcare provider, it is imperative to the health and well-being of our community that Valley View remains a financially viable organization,\u201d she said. \u201cMost of our patients work with us to develop a payment plan or pursue financial assistance.\u201d<\/p>\n The collection agency that took the employee to court, A-1 Collection Agency, advertises itself on its website<\/a> as empathetic: \u201cWe understand times are tough and money is tight.\u201d<\/p>\n Pilar Mank<\/a>, who oversees operations at A-1\u2019s parent company, Healthcare Management, said it accepts payment plans as small as $50 a month and that most of the hospitals it works with allow it to offer a discount if patients pay all at once.<\/p>\n \u201cSuing a patient is the absolute last resort,\u201d she said. \u201cWe try everything we can to work with the patient.\u201d<\/p>\n If you can’t maintain your health, how are you going to work to pay back a debt?<\/p>\n Adam Fox, deputy director of the Colorado Consumer Health Initiative<\/p><\/blockquote>\n Hospitals sometimes also garnish wages from their own employees for care they provided them. In one case, a hospital employee worked her way up from housekeeper to registrar to quality analyst. She even participated in public events representing her employer and appeared on the hospital\u2019s website as a featured employee \u2014 while the court issued writs of garnishment until her $10,000 in medical bills from the hospital was paid off.<\/p>\n \u201cHospital care costs money to deliver,\u201d said Colorado Hospital Association spokesperson Julie Lonborg about hospitals\u2019 garnishing their own employees\u2019 wages. \u201cIn some ways, I think it’s funny to be asked the question. I would understand if someone said, \u2018Why aren’t you garnishing their wages?\u2019\u201d<\/p>\n Studies show that hospital debt collection efforts through wage garnishment bring in only about 0.2% of hospital revenues, said April Kuehnhoff<\/a>, a senior attorney with the National Consumer Law Center, which advocates for people with low incomes.<\/p>\n “We also know that there are states that don’t allow this at all,\u201d she said. \u201cHospitals are continuing to provide medical care to consumers.\u201d<\/p>\n Smooth Sailing for Collectors \u2014 But Not for Patients<\/strong><\/p>\n Health care providers appeared as the plaintiffs in only 2% of the medical debt cases. Instead, cases were filed almost entirely by third-party debt collectors and buyers, with BC Services and Professional Finance Company behind more than half of the cases, followed by A-1 Collection Agency and Wakefield & Associates.<\/p>\n Debt buyers make money by buying debt from providers who\u2019ve given up on getting paid then collecting what they can of the money owed, plus interest. Debt collectors get paid a percentage of what they recover. Some companies do a bit of both.<\/p>\n BC Services declined to comment, and Wakefield & Associates did not respond to questions.<\/p>\n Charlie Shoop, president of Professional Finance Company, said his company initiates wage garnishment on less than 1% of all accounts placed with it for collection.<\/p>\n Health care providers in Colorado can no longer hide behind debt collectors\u2019 names when they sue people, according to a 2024 state law<\/a> prompted by a 9News-Colorado Sun investigation<\/a> in partnership with a Colorado News Collaborative-KFF Health News reporting project<\/a>.<\/p>\n In many states, the path for filing a case against a debtor and garnishing their wages is relatively smooth \u2014 especially if the debtor doesn\u2019t appear in court.<\/p>\n \u201cIt’s unbelievably easy,\u201d said Dan Vedra, a lawyer in Colorado who often represents consumers in debt cases. \u201cIf you have a word processor and a spreadsheet, you can mass-produce thousands of lawsuits in a matter of hours or minutes.\u201d<\/p>\n Within KFF Health News\u2019 sample, nearly all the medical debt cases were default judgments, meaning the patient did not defend themselves<\/a> in court or in writing. Missing a court date can happen for a variety of reasons, such as not receiving the notice in the mail, assuming it was a scam, knowingly ignoring it, or not having the time to take off from work.<\/p>\n Vedra and other debt law experts said a high rate of default judgments indicates a system that favors the pursuers over the pursued \u2014 and increases the chances someone will be harmed by an erroneous bill.<\/p>\n But in New Hampshire, creditors now have to keep going to court for each paycheck they want to garnish, because the state allows creditors<\/a> to garnish only wages that have already been earned, said Maanasa Kona,<\/a> an associate research professor at the Center on Health Insurance Reforms at Georgetown University.<\/p>\n \u201cIt might not look like much on paper,\u201d she said. \u201cIt’s just not worth it if they have to keep going back to court.\u201d<\/p>\n If you have a word processor and a spreadsheet, you can mass-produce thousands of lawsuits in a matter of hours or minutes.<\/p>\n Dan Vedra<\/p><\/blockquote>\n Wrongly Pursued for Bills<\/strong><\/p>\n The nation\u2019s medical billing setup is already prone to errors due to its complexity, according to Barak Richman<\/a>, a law professor at George Washington University and a senior scholar at Stanford Medicine who has studied medical debt collection practices<\/a> in several states. \u201cBills are not only noncomprehensible, but often wrong,\u201d Richman said.<\/p>\n Indeed, Colorado\u2019s Health Care Policy & Financing Department, which runs Medicaid in the state, said it sent out nearly 11,000 letters in the past fiscal year to health providers and collectors that erroneously went after patients on Medicaid. Bills for Medicaid recipients are supposed to be sent to Medicaid, not the patients, who typically pay a nominal amount, if anything, for their care.<\/p>\n Shoop said his industry has pushed Colorado, without success, for access to a database that would allow them to confirm if patients had Medicaid coverage.<\/p>\n Colorado\u2019s Medicaid program declined to comment.<\/p>\n Patricia DeHerrera in Rifle, Colorado, had to prove that she and her children had Medicaid when they received care at Grand River Health \u2014 but only after A-1 contacted her employer at the time, the gas station chain Kum & Go, with court-approved paperwork to take a portion of her paychecks.<\/p>\n She contacted the state, which sent letters<\/a> to the hospital and the collector notifying them they were engaging in \u201cillegal billing action\u201d and telling the collector to stop. The companies did.<\/p>\n Theresa Wagenman, controller for Grand River Health, said if a patient can present a letter from a Medicaid caseworker saying they\u2019re eligible, then their bills get removed from the collections pipeline. Wagenman also said patients get at least eight letters in the mail and several phone calls before Grand River gives the go-ahead for the collector to send them to court.<\/p>\n DeHerrera\u2019s main advice to others in this situation: \u201cKnow your rights. Otherwise, they\u2019re going to take advantage of you.\u201d<\/p>\n Yet fighting back<\/a> isn\u2019t easy.<\/p>\n Nicole Silva, who lives in the 900-person town of Sanford in south-central Colorado, said she and her family were all on Medicaid when her daughter was in a car crash. Still, court records show, her wages were garnished for a $2,181.60 ambulance ride, which grew to more than $3,000<\/a> from court fees and interest.<\/p>\n She tried to prove<\/a> the bill was wrong, contacting her county\u2019s social services office, but Silva said it wasn\u2019t helpful and she wasn\u2019t able to reach the right person at a state office. The state Medicaid program confirmed to KFF Health News that her daughter was covered at the time of the wreck.<\/p>\n Fighting the bill felt like too much for Silva and her husband to handle while parenting a growing number of kids, one of them severely disabled, and working \u2014 she as a preschool teacher and he as a rancher.<\/p>\n Not receiving the roughly $500 a month that she said came out of her pay was enough to affect their ability to pay other bills. \u201cIt was deciding to buy groceries or pay the electric bill,\u201d Silva said.<\/p>\n When their electricity got shut off, she said, they had to scramble to borrow money from colleagues and friends to get it turned back on \u2014 with an extra fee.<\/p>\n She said the saga makes her hesitant to call an ambulance in the future.<\/p>\n Fox, of the Colorado Consumer Health Initiative, said consumers often think they cannot do anything to stop their wages from being garnished, but they can contest it in court, for example by pointing out they should have qualified for discounted \u2014 or charity \u2014 care if the hospital that provided the treatment is a nonprofit.<\/p>\n DeFusco, the economist, believes filing for Chapter 7 bankruptcy<\/a> is an underused option for debtors. It halts garnishment in its tracks, though not always permanently, and it comes with other consequences. But he understands it\u2019s a Catch-22: It\u2019s a complex process<\/a> and typically necessitates hiring a lawyer.<\/p>\n \u201cTo get rid of your debt, you need money,\u201d he said. \u201cAnd the whole reason you’re in this situation is because you don’t have money.\u201d<\/p>\n We wanted to know how often Coloradans get their wages garnished due to medical debt. Courts don\u2019t compile this information, and researchers and advocates haven\u2019t tracked it systematically.<\/p>\n So we created our own database<\/a>. We requested a list of all civil cases across the state in which judges gave permission for a person\u2019s earnings to be garnished \u2014 known as writs of garnishment in court lingo \u2014 from Feb. 1, 2022, through Feb. 1, 2024. The Colorado Supreme Court Library<\/a> provided a list from all courts except for Denver County Court, which provided its own records. The combined list comprised nearly 90,000 unique court cases. We split up the cases by county population \u2014 small (fewer than 10,000 people), medium (10,000 to 100,000 people), and large (more than 100,000 people) \u2014 then generated a random sample of 400 cases from each group to ensure we evaluated medical debt across counties of all sizes.<\/p>\n To identify medical debt cases, we looked at the original creditors named in court records, primarily the complaints or affidavits of indebtedness. Often, this information was available through a state website<\/a>. When it wasn\u2019t available online, we asked county courthouses to send us supporting documents. We counted dentists as medical providers. We excluded 14 cases in which the debt wasn\u2019t exclusively medical.<\/p>\n We looked only at cases in which courts approved money to be garnished from someone\u2019s paycheck, as opposed to from other sources such as their bank accounts. We did not review garnishment cases involving child support, taxes, or federal student loans.<\/p>\n KFF Health News intern Henry Larweh, data editor Holly K. Hacker, Mountain States editor Matt Volz, and web editor Lydia Zuraw contributed to this report.<\/em><\/p>\n\n KFF Health News<\/a> is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF\u2014an independent source of health policy research, polling, and journalism. Learn more about KFF<\/a>.<\/p>\n\n
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