13.4.1 Health Care Debts
13.4.1 Health Care Debts
A few states, recognizing the special burden created by health care debts, have enacted statutes limiting health care debt collection or otherwise assisting debtors facing health problems. Nevada198 and Ohio199 forbid execution on the primary residence for health care debts during the lifetime of the debtor and certain specified dependents. While a lien may be created, it may be foreclosed only after the residence ceases to be occupied by the protected persons. West Virginia provides a larger homestead exemption for debts resulting from “catastrophic illness or injury.”200
If an illness of the debtor or a family member has kept the debtor out of work for two or more weeks, Kansas forbids wage garnishments for two months after the debtor returns to employment.201 Wyoming exempts from garnishment contributions to a qualified medical savings account (except for health care debts) to the extent the contributions are allowable under the Internal Revenue Code.202
Louisiana exempts the full value of the home, rather than a capped amount, for certain debts arising directly as a result of a catastrophic or terminal injury or illness.203
A now-repealed Ohio statute, which limited the percentage of wage garnishment for health care debts, was upheld as a reasonable classification, in light of the public policy of encouraging people to seek needed medical care.204 Medical debt is discussed in detail in Chapter 9, supra.
Footnotes
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198 Nev. Rev. Stat. § 21.095.
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199 Ohio Rev. Code Ann. § 2329.66(A)(1)(a) (West). See Edwards v. McCormack, 136 F. Supp. 2d 795 (S.D. Ohio 2001) (lawyer-collector violated Fair Debt Collection Practices Act and Ohio deceptive practices statute by threatening foreclosure on real property owned by Ohio health-care debtors); Wickliffe Country Place v. Kovacs, 765 N.E.2d 975 (Ohio Ct. App. 2001) (fact question whether nursing home provided health care services and supplies); Meadow Wind Healthcare Ctr. v. McInnes, 2000 WL1055938 (Ohio Ct. App. July 24, 2000) (fact question whether services of nursing home were “health care services or supplies”; if debtor shows that home provided any health care service or supply, statute will apply).
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200 W. Va. Code § 38-9-3(b).
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201 Kan. Stat. Ann. § 60-2310. But see State ex rel. Moeller v. White, 216 P.3d 727 (Kan. Ct. App. 2009) (statute does not apply to permanently disabled worker who is receiving regular disability benefits).
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202 Wyo. Stat. Ann. § 1-20-111.
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203 La. Stat. Ann. § 20:1. Cf. In re Collet, 351 B.R. 395 (Bankr. W.D. La. 2006) (Louisiana’s enhanced homestead exemption for debts “arising directly” from “catastrophic or terminal illness or injury” did not apply when part of borrowed money was used for family living expenses while debtor recovered from surgery).
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204 St. Ann’s Hosp. v. Arnold, 672 N.E.2d 743 (Ohio Ct. App. 1996); Wooster Cmty. Hosp. v. Anderson, 670 N.E.2d 563 (Ohio Ct. App. 1996) (classification is rational: health care debtors are different from others because of the life or death necessity of health care and the extra burdens imposed by paying back a debt while also suffering health problems). But see Cmty. Physical Therapy v. Wayt, 639 N.E.2d 515 (Ohio Ct. App. 1994) (statute is unconstitutional because it has no rational relationship to any governmental purpose).