--:-- Sean Rameswaram: Welcome to Today Explained. I'm Sean Rameswaram.
--:-- Sean Rameswaram: Today, we're talking about medical debt. And to explain this complex issue, we have Lizzie Presser, a reporter from ProPublica. Lizzie, thanks for joining us.
--:-- Lizzie Presser: Thanks for having me.
--:-- Sean Rameswaram: Let's start with a story. There's a town in Kansas called Coffeyville. It's named after a guy named James A. Coffey. But I want to tell you about three other people I met there. There's a guy, there's a lawyer, and there's a judge. The guy is named Tress Biggs.
--:-- Lizzie Presser: That's right. Tress Biggs is a guy I met in Coffeyville. He's a father of three, and his son had been diagnosed with leukemia a year before I met him.
--:-- Sean Rameswaram: And the first time he was arrested, he was out hunting in 2008. His son had been diagnosed with leukemia a year before, and Tress wanted to take him out for some fresh air.
--:-- Lizzie Presser: That's right. Tress took his son out hunting, and they were looking for roosting doves. A game warden came through to check their hunting permits, and Tress didn't have a permit.
--:-- Sean Rameswaram: And the game warden ran Tress's license, and he found that there was a warrant out for Tress's arrest.
--:-- Lizzie Presser: That's right. Tress was shocked and confused. He didn't understand how he could have broken the law or even when he might have had time to break the law.
--:-- Sean Rameswaram: He was working 70-hour weeks at a lumberyard and on construction sites. And he had never been to jail before.
--:-- Lizzie Presser: That's right. And it wasn't until the game warden drove him over the county line and got him to the courthouse that he was told that the arrest warrant was for failure to appear in court for a hearing over unpaid medical debt.
--:-- Sean Rameswaram: So Tress was booked. It was scary as hell.
--:-- Lizzie Presser: Yeah, it was. He was given an orange jumpsuit, and he was asked if he wanted flip-flops or shoes. And he said, "I want shoes in case I need to run."
--:-- Sean Rameswaram: And he was told that he was going to have to pay $500 cash bail to get out.
--:-- Lizzie Presser: That's right. He had about $50. And when he appeared in court for his bond hearing, the $500 that his friend had lent him was applied to his medical debt.
--:-- Sean Rameswaram: This is actually pretty common in Coffeyville.
--:-- Lizzie Presser: One of the driving forces is the second of the three people I mentioned. The first was Tress. The second is the lawyer, Michael Hassenplug.
--:-- Sean Rameswaram: Michael Hassenplug is the most notorious debt collector in town.
--:-- Lizzie Presser: He started off working for a law firm, and he realized that all the other lawyers at his firm thought of collections cases as kind of petty work and beneath them.
--:-- Sean Rameswaram: But Michael Hassenplug realized that there was a real opportunity.
--:-- Lizzie Presser: He computerized his collections cases, and he realized that not only could he sue debtors for non-payment, but he could also follow up on those lawsuits pretty frequently.
--:-- Sean Rameswaram: So he would start calling debtors to court every couple of months so he could learn of any changes to their finances.
--:-- Lizzie Presser: And if they weren't paying, but they were working, he realized he could also garnish a quarter of a debtor's wages.
--:-- Sean Rameswaram: And he became really good at this.
--:-- Lizzie Presser: He started his own firm, and he was representing cities and banks and also hospitals and doctors and dentists, even veterinarians.
--:-- Sean Rameswaram: When I was in Coffeyville this summer, I met him, and there was one case I watched, wasn't Tress, but Hassanplug was trying to collect a debt from a man who owed a couple thousand dollars for an ambulance bill and interest.
--:-- Lizzie Presser: The man was disabled, he was schizophrenic, and he was no longer working. And he had no income besides food stamps and disability checks.
--:-- Sean Rameswaram: And Hassanplug began to go over his earnings, which he had done many times before.
--:-- Lizzie Presser: And then he set down his pen and he said, "Between you and me, you're never going to pay this bill, are you?"
--:-- Sean Rameswaram: And the debtor replied, "Nope, if I had the money, I'd pay it."
--:-- Lizzie Presser: And Hassanplug looked at him and he smiled and he said, "Well, this will end when one of us dies."
--:-- Sean Rameswaram: The lawyer's work has thrived largely because of the third of the three people I said I was going to talk about.
--:-- Lizzie Presser: The first guy was Tress. The second was the lawyer, Hassanplug. And this is the judge, David Casement.
--:-- Sean Rameswaram: The thing about Judge Casement is that he is a cattle rancher.
--:-- Lizzie Presser: And he was a cattle rancher when he was appointed as a judge, also in the 80s.
--:-- Sean Rameswaram: He wasn't a lawyer. He had never gone to law school.
--:-- Lizzie Presser: And he had never taken a course in law.
--:-- Sean Rameswaram: And this is actually somehow quite common in lower-level courts across the country.
--:-- Lizzie Presser: It's a vestige of the 19th century, I think.
--:-- Sean Rameswaram: But in some states, it's also a way to cut costs.
--:-- Lizzie Presser: So he's learning the ropes of becoming a judge, and attorneys are starting to explain to him that judges can hold debtors in contempt of court if they aren't appearing to their hearings.
--:-- Sean Rameswaram: If a judge holds someone in contempt of court, then they can issue a warrant for their arrest.
--:-- Lizzie Presser: So debtors wouldn't appear for their hearings. Hassanplug would ask the judge for a warrant.
--:-- Sean Rameswaram: And as long as the debtor had been served with their papers properly, Judge Casement would provide that warrant.
--:-- Lizzie Presser: And so that's how people with medical debt were regularly and continue to be regularly ending up in jail in Coffeyville.
--:-- Sean Rameswaram: I want to just get back to Tress.
--:-- Lizzie Presser: So Tress' arrest in 2008, that wasn't his only arrest.
--:-- Sean Rameswaram: Four years later, he was arrested again.
--:-- Lizzie Presser: And this time, it was because of an unpaid bill for a radiologist.
--:-- Sean Rameswaram: The attorney who was representing that radiologist was Michael Hassanplug.
--:-- Lizzie Presser: And Tress had missed two hearings.
--:-- Sean Rameswaram: The same year that he was arrested that second time, his family calculated that they had accrued more than $70,000 in medical debt.
--:-- Lizzie Presser: Tress's wife had had to quit her job to care for their son when he was diagnosed with leukemia.
--:-- Sean Rameswaram: And so they'd become a single-income family.
--:-- Lizzie Presser: And then Tress's wife had gotten really sick, and she had started having sometimes weekly seizures that wiped her short-term memory.
--:-- Sean Rameswaram: I was close to almost $100,000 in medical bills.
--:-- Lizzie Presser: Yeah, with me, my wife, and all my other kids.
--:-- Sean Rameswaram: Kansas is one of the states that didn't expand Medicaid.
--:-- Lizzie Presser: And Tress's family earned too much money to qualify for Medicaid and too little money to afford private insurance.
--:-- Sean Rameswaram: So in 2012, they filed for bankruptcy.
--:-- Lizzie Presser: And I felt bad because we had to do bankruptcy.
--:-- Sean Rameswaram: I didn't want people to know that I'm bankrupt because it just makes me look like not much of a man.
--:-- Lizzie Presser: Recently, Tress got a job that covered him, but his deductible was $5,000.
--:-- Sean Rameswaram: And so by the time that I met Tress this summer, he'd been sued seven times since 2006.
--:-- Lizzie Presser: And he still has thousands of dollars in medical debt in collections today.
--:-- Sean Rameswaram: I spent a lot of time in Coffeyville watching medical debt collection days in court.
--:-- Lizzie Presser: And the people are visibly sick. They're limping to the dais. They're wearing bandages.
--:-- Sean Rameswaram: I met one guy who was in a wheelchair, and he had this wound vacuum that was pumping fluids to his wounds.
--:-- Lizzie Presser: He had just had a heart attack.
--:-- Sean Rameswaram: And the judge will ask these debtors to take an oath, and he'll make sure that no one is objecting to the alleged debt.
--:-- Lizzie Presser: And then he'll ask them to stick around and talk with the collection's attorneys, and he'll leave the room.
--:-- Sean Rameswaram: And the debtors none of them have lawyers.
--:-- Lizzie Presser: I watched days and days of court.
--:-- Sean Rameswaram: No one came with a lawyer.
--:-- Lizzie Presser: And we talking the first day I got there I watched about 90 people had been summoned for medical debt in a town of 9,000.
--:-- Sean Rameswaram: And the debtors have no sense of their rights or how to assert their rights.
--:-- Lizzie Presser: So from my reporting in Coffeyville, what I discovered is that we still do have kinds of debtors' prisons, even though they've been outlawed.
--:-- Sean Rameswaram: Tress's case is one of thousands across the country.
--:-- Lizzie Presser: This isn't just a Coffeyville problem. This is definitely not a Coffeyville problem. It's a national one.
--:-- Sean Rameswaram: The rate of medical debt in Coffeyville is actually about average.
--:-- Lizzie Presser: One in six Americans have medical debt.
--:-- Sean Rameswaram: And Coffeyville seemed like an anomaly even to me.
--:-- Lizzie Presser: But what I realized is that it's not.
--:-- Sean Rameswaram: So I would talk to consumer protection lawyers and debt collection experts, and I would talk them through everything I was seeing in the courthouse in Coffeyville.
--:-- Lizzie Presser: And all of them responded that this is how it's working across the country.
--:-- Sean Rameswaram: I imagine many Americans and many people listening to this in America have some sense of medical debt.
--:-- Lizzie Presser: But how big of a problem is it in the country?
--:-- Sean Rameswaram: So by some estimates, Americans have more than $80 billion in medical debt.
--:-- Lizzie Presser: Debt collection is now an $11 billion industry with 8,000 firms nationally.
--:-- Sean Rameswaram: And medical debt makes up almost half of what's collected each year.
--:-- Lizzie Presser: Did the Affordable Care Act do anything to address medical debt in the United States?
--:-- Sean Rameswaram: So we might think that the ACA has contained medical debt, but it's still pretty unclear whether or not it has.
--:-- Lizzie Presser: More than a dozen states didn't expand Medicaid.
--:-- Sean Rameswaram: So we have this health care coverage gap in those states.
--:-- Lizzie Presser: And then on top of that, when we talk about the ACA, we talk a lot about the expansion of coverage.
--:-- Sean Rameswaram: But we often don't talk about how it didn't contain costs.
--:-- Lizzie Presser: And now insurers have these enormous deductibles, like Tress's $5,000 deductible, and people simply can't pay them.
--:-- Sean Rameswaram: And managing that kind of debt is hard enough on its own.
--:-- Lizzie Presser: But on top of that, you got to worry about getting arrested?
--:-- Sean Rameswaram: I think one of the frustrating things about this reporting was that everyone was doing their job.
--:-- Lizzie Presser: And so I could see this kind of system that was now this well-oiled machine.
--:-- Sean Rameswaram: So you can't pay a hospital bill. That medical debt is passed on to a collection agency.
--:-- Lizzie Presser: Then that debt's passed to an attorney.
--:-- Sean Rameswaram: And then you have repeated court hearings.
--:-- Lizzie Presser: And then you miss two, and you can be put in jail.
--:-- Sean Rameswaram: And that's what's been happening in Coffeyville and in courts in pockets across the country.
--:-- Lizzie Presser: If you can be put in jail, I guess it's surprising that people aren't showing up to these hearings.
--:-- Sean Rameswaram: Why aren't they showing up?
--:-- Lizzie Presser: Sometimes it's because they don't even know that they have these hearings.
--:-- Sean Rameswaram: Sometimes it's because they don't know they have the hearings.
--:-- Lizzie Presser: Some people live hours away, and they're in rural areas where there's no transportation.
--:-- Sean Rameswaram: Or it can be a serious burden for them to take time off of work, especially if they can't take paid days off work and they need the money.
--:-- Lizzie Presser: Sometimes the mail is sent to the wrong address, or they don't open the piece of paper that's come to their door.
--:-- Sean Rameswaram: But I think fundamentally a lot of them just didn't understand the consequences of missing a hearing.
--:-- Lizzie Presser: And even when warrants are issued against them, they often don't even know it.
--:-- Sean Rameswaram: So they can be pulled over in a traffic stop and find out that there's a warrant out and they're going to jail.
--:-- Lizzie Presser: Tell me more about these sort of self-judges who are involved in this process who are chasing down poor people for medical debt.
--:-- Sean Rameswaram: Do they think this is fair?
--:-- Lizzie Presser: I can't speak to Judge Caseman's motivations or whether or not he sees this as an injustice.
--:-- Sean Rameswaram: But he didn't want to be putting debtors in jail.
--:-- Lizzie Presser: The way he saw it, he was doing his job and he was using the law as he understood it.
--:-- Sean Rameswaram: But all of that being said, he did also acknowledge that collections attorneys could use the law to their advantage.
--:-- Lizzie Presser: Judges will say, "You know, I'm just upholding the order of the court."
--:-- Sean Rameswaram: But if that were the case, anyone who paid bail would appear and get their money back.
--:-- Lizzie Presser: But in most of these cases, when they pay cash bail and it's cash bail only, that money then is given over to the creditor.
--:-- Sean Rameswaram: And any collection agency that's working on commission gets a cut of that bail.
--:-- Lizzie Presser: And so you see in that moment that this isn't jail for non-appearance.
--:-- Sean Rameswaram: What lawyers will say is that it functionally looks like jail as a way to collect medical debt.
--:-- Lizzie Presser: It's jail to make money. It's jail to pay off a medical bill.
--:-- Sean Rameswaram: So I guess the million-dollar question is, is anyone trying to fix this?
--:-- Lizzie Presser: It's a really tricky question.
--:-- Sean Rameswaram: And one of the problems is that a number of systems are connected here.
--:-- Lizzie Presser: So even Casement, who's a Republican judge, was telling me that he sees the main fix as changing the entire health care system and making it health care for all.
--:-- Sean Rameswaram: But even if there were some sort of panacea like Medicare for all or a public option that would give people a way out of creating new medical debt, they would still potentially have tens of thousands, if not hundreds of thousands, in some cases, of dollars worth of medical debt to pay off.
--:-- Lizzie Presser: That's definitely the case.
--:-- Sean Rameswaram: In a lot of states, the statute of limitations for these cases is quite long.
--:-- Lizzie Presser: So a lot of the people I was meeting in Coffeyville were haunted by debts from a decade ago.
--:-- Sean Rameswaram: And debts that were then accruing interest yearly so that their bills had doubled over the last 10 years.
--:-- Lizzie Presser: Just changing the health care system isn't going to fix what we have in terms of medical debt right now.
--:-- Sean Rameswaram: What we're seeing is that going to jail for medical debt has become this indirect consequence of unrestrained doctor and hospital prices.
--:-- Lizzie Presser: People are terrified of going to the hospital.
--:-- Sean Rameswaram: But at the end of the day, they're also not going to stop calling an ambulance just because they're poor.
--:-- Sean Rameswaram: Thanks to Lizzie Presser for providing us audio from her reporting for ProPublica.
--:-- Lizzie Presser: Her story, which you can find at ProPublica.org, is titled When Medical Debt Collectors Decide Who Gets Arrested.
--:-- Sean Rameswaram: The visuals you'll find there add another dimension to the story.
--:-- Sean Rameswaram: I'm Sean Rameswaram. This is Today Explained.
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