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Advanced Policy Analysis-Medical Debt & Hospital Charity Care Policies: A Case Study

Advanced Policy Analysis

Medical Debt & Hospital Charity Care Policies: A Case Study

by Nisha Kurani  as part of the program of professional education at the Goldman School of Public Policy, University of California at Berkeley.

Project Overview

Medical bills and medical debt have a lasting impact on the financial stability for families, particularly vulnerable populations. The uninsured and lower income groups are more likely to experience problems paying medical bills, although people of all socio- economic groups report experiencing problems with medical costs. The Affordable Care Act (ACA) aimed to increase protections for consumers by increasing access to private and public insurance coverage, as wel

l as mandating charity care for low-income, uninsured or underinsured patients in nonprofit hospitals. While uninsured individuals do not have any insurance to help cover costs in the case of medical necessity, underinsured refers to a person who has health insurance but faces high medical costs. This is especially relevant today: recent surveys show that 35% Americans still experience issues with medical costs, and 47% of that group reported that they were unaware of charity care after receiving health care services. While health insurance mitigates the impact of medical bills by providing some protection, medical bills nonetheless remain a problem for millions of insured and uninsured individuals.

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This is particularly relevant for the client, Housing and Economic Rights Advocates (HERA), a legal advocacy clinic based in Oakland, California. HERA provides legal services and information to Californians, particularly those most vulnerable, to promote financial security free of economic abuses. They also advocate for stronger consumer protections from debt at the state level. While HERA’s focus in the past has centered around homeownership and protections from mortgage debt, over the past 6 years, HERA has opened its doors to address the vast array of debt and credit concerns experienced by tenants and homeowners alike that are unrelated to housing, while continuing to address housing related concerns for renters and homeowners.

The goal of this report is two-fold. The first is to analyze the current landscape of medical costs, bills, and debt for low-income individuals, with a case study on HERA  clients, to understand why medical bills may persist among insurance coverage expansions and charity care policies in California. The second part of this paper examines charity care policies for hospitals in Alameda and Contra Costa counties in the Bay Area, California. California in particular has policy protections in place for low-income uninsured and certain insured individuals, yet data suggests that those policies are underutilized by eligible populations. The paper will conclude with policy recommendations on how to improve charity care and consumer protections in the U.S.

See the full paper here.

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New HERA Brochure

Proud to share our new HERA brochure, find out Who We Are.

HERA Brochure 2017.06.20_Page_1

 

HERA Brochure 2017.06.20_Page_2

Thank you to our wonderful friends at PSPrint for their kind donation to HERA. We are delighted with the results! For high quality online printing you must check out www.psprint.com. Thanks again!

Please contact inquiries@heraca.org to request brochures. You can access a PDF version of our brochure by following this link: HERA Brochure 2017.06.20

(HERA in the News) From Foreclosure to Eviction: One Family’s Struggle to Recover [KQED May 30th, 2017]

When Vanessa and Richard Bulnes got an eviction notice, it felt sadly ironic. The Bulneses were unable to pay the rent because their corporate landlord took three years to remediate high levels of lead in the backyard soil, which caused Vanessa to lose her business — a family home child care that she had run for more than 20 years.

It was the latest in a string of injustices that happened to the Bulnes family: first, loan modification fraud, then foreclosure, now the threat of eviction. Their story is emblematic of a bigger problem: the disproportionate loss of African-American and Latino wealth during the foreclosure crisis and the obstacles to build up that wealth again. Between 2007 and 2013, so many African-American and Latino homeowners in Oakland were wiped out by foreclosure that entire neighborhoods were transformed. Many of the homes that were lost ended up in the hands of corporate investors, who then rented them out, sometimes to the same families who had lost their own homes. And that put those families, like the Bulneses, at risk of much more loss.

Losing a home often begins this way: A family hits a hard spot, a health crisis or a loss of income. At the time of the stroke, Richard was working at Meals on Wheels. The family lost about $2,000 a month in income, about the same amount as their mortgage payment at the time, which had ballooned after they refinanced. They still had Vanessa’s income from her child care business, but they decided their best option was to try to modify their loan.

The Bulneses, though, were caught up in a bigger web. Oakland and other cities across the country are now suing big banks for targeting African-American and Latino homeowners with loans that had abusive rates. At the same time, many banks weren’t playing fair to help homeowners modify their loans.

“It seemed like at every point, when we got to where we thought we were going to get a modification, they needed another piece of paperwork, they needed another bank statement,” said Vanessa, who is 58. “There was always something else they needed, and when we gave them that, ‘Oh we lost that, could you send something else?’ ”

What Vanessa describes sounds really familiar to Maeve Elise Brown, director of the statewide organization Housing and Economic Rights Advocates. In 2009, President Barack Obama had introduced the Home Affordable Modification Program to help struggling homeowners modify their loans, but homeowner advocates, researchers and news organizations like ProPublica found that banks often broke the rules.

“Mortgage servicers were telling people to turn in paperwork over and over and over again. They weren’t looking at it, they would shred it. They would deny people instantly,” Brown said. “Not everyone qualified, but a whole bunch of people could, but were prevented from accessing that relief by the mortgage servicing companies.”

Latino and African-American neighborhoods, like the Bulneses, were hit the hardest by the foreclosure crisis. These are the same neighborhoods that were redlined decades ago, with residents denied mortgages simply because of where they lived. Across the country, African-American and Latino neighborhoods lost three to four times more homes than white neighborhoods during the recent mortgage crisis, according to Cornell University research. On the Bulnes’ six-block street alone, at least 35 properties were foreclosed between January 2006 and December 2012, according to the website PropertyRadar, which tracks foreclosures.

Read the full article here.

 

HERA Settles Class Action Against Chase for Violating Fair Debt Collection Laws in Collecting Purchase Money Home Loans

Playtime with my precious girl

Oakland, California, May 26, 2017-   Judge Winifred Smith of the Alameda County Superior Court approved the settlement of Housing and Economic Rights Advocates’ (HERA) longstanding class action lawsuit against Chase Bank for deceptive practices in collecting purchase money mortgage loans.

HERA filed Banks v. JPMorgan Chase Bank (Case No. RG12614875) in January 2012 under California’s purchase money anti-deficiency law, challenging Chase’s attempts to collect mortgages used to purchase family homes. After four years of hotly contested litigation, including HERA’s amicus curiae participation in four related appellate cases, a settlement was reached.  HERA’s Banks case was designated the lead case that consolidated four related anti-deficiency class actions for joint settlement.

Judge Smith granted final settlement approval and entered final judgment on December 9, 2016. The settlement awards $500,000 in statutory damages to Chase borrowers from whom Chase attempted to collect loan balances on purchase money loans; a payment of $364 to each class member regardless of whether they made payments in response to Chase’s collection attempts. The settlement provides additional compensation to class members who made payments, prevents Chase from engaging in further collection efforts, and requires Chase to provide corrective credit reports to the major credit reporting bureaus stating that the borrowers do not owe anything on the loans.

HERA litigation attorneys Arthur Levy, Elizabeth Letcher, and Noah Zinner led the litigation effort, with co-counsel Kemnitzer, Barron & Krieg.

For more information please contact, Maeve Elise Brown Executive Director, Housing and Economic Rights Advocates, at melisebrown@heraca.org or (510) 271-8443.

Predatory Lending Class Action Against CashCall Opens New Chapter as Federal Courts Turn to California Supreme Court for Guidance

Senior Asian Couple At Home Relaxing On Sofa TogetherOakland, California, May 26, 2017- The nine-year marathon class action litigation attacking CashCall’s exorbitantly high interest loans entered a new phase last month when the federal Ninth Circuit Court of Appeals took the unusual step of requesting guidance from the California Supreme Court on relevant state law.

CashCall pioneered the high-interest $2,600 personal loan in 2005.  California’s usury law does not place fixed interest rate limits on personal loans in excess of $2,500. CashCall took advantage of this loophole to make $2,600 loans in California at interest rates as high as 135%. Other lenders followed suit, charging rates as high as 200% to Californians seeking short-term loans.

These loans are “subprime,” and typically offered to borrowers with low credit scores, uneven credit histories, and who are in financial distress. CashCall uses saturation TV advertising urging viewers to just get up and “make the cash call.” CashCall’s website says you can “APPLY IN MINUTES & GET CASH TODAY!” with an easy online application.

The class action, filed in June 2008, challenges CashCall’s loans under California’s “unconscionability” law.  This law empowers courts to strike down loans that are unreasonably one-sided or unfair. The case ended up in the federal Court of Appeals after a San Francisco federal judge ruled the courts do not have the authority to invalidate consumer loans or to provide relief to borrowers.

In April 2017, the Ninth Circuit Court of Appeals issued a decision invoking the unusual procedure of certifying a question of state law to the California Supreme Court. The federal appeals court asked the California Supreme Court whether loans over the dollar amount of the usury limit ($2,500) can be invalidated under California’s unconscionability doctrine.

Plaintiffs in the case are hopeful that the California Supreme Court will take advantage of this opportunity to issue a ruling protecting California borrowers against predatory loans and validating court power to curb unconscionable lending in California.

HERA’s Director of Litigation, Arthur Levy, is co-lead counsel in the CashCall case with four other law firms.

For more information please contact, Maeve Elise Brown Executive Director, Housing and Economic Rights Advocates, at melisebrown@heraca.org or (510) 271-8443.