Assemblyman Andrew Goodell, R-Jamestown, debates a program banning most hospital debt collection for those earning up to 400% of federal poverty limits.

Assemblyman Andrew Goodell is blasting a program included in the state budget that will ban hospitals from suing patients earning less than 400% of the federal poverty level.

That means hospitals can’t sue to collect medical debt for four-person households earning $120,000 a year.

The legislation also expands hospital financial assistance programs for low-income New Yorkers, limits the size of monthly payments and interest charged for medical debt, implements other protections to improve access to financial assistance, and mitigates the deleterious effects of medical debt on New Yorkers.

Goodell argued on the Assembly floor on Friday that the program is a hidden tax on state residents. Hospitals have a bad debt charity pool that is funded through a surcharge on Medicaid and Medicare payments as well as a surcharge on health insurance.

“The cost of this program, which is currently about $1 billion, will just explode,” Goodell said before mentioning his pending retirement from the Assembly. “This is like a program for universal free health care at hospitals for those who are earning 27% or more of the median income in your community. In my community, by the way, you could earn double, double, the individual per capita (income) and get free hospitalization. My friends, this is an astronomically expensive proposal that should not be part of this budget, because you will be paying for it long after I leave.”

Assemblywoman Helene Weinstein said the hospital indigent program costs in the hundreds of millions of dollars in response to a question from Goodell. The legislation changes both how the indigent program can be used and how hospitals can collect that debt. The program is open to all, including those who are not New York state residents, though Weinstein did not know how much it would cost to provide hospital care for immigrants under the program.

Weinstein said in addition to the income limitations on hospital debt collection, the hospital debt has to be more than 10% of a person’s income before a bad debt collection lawsuit can be filed.

“Medical expenses are, as you well know, are not cheap and most people, if they can afford insurance, have insurance. It is amazing how expensive an unexpected two week period of time in a hospital ICU unit can be,” Weinstein said. “I think most people are not proactively doing the calculations as to how much money they earn and anticipating they’re going to need some medical care that’s going to kick them into this category.”

Supporters say more than 700,000 New Yorkers have medical debt in collections. Individuals with medical debt are less likely to seek necessary medical care and report being forced to cut back on food, heat, and rent. They say medical debt threatens the financial stability of many individuals and families as well as the overall health of state residents.

The state budget also mandates a separate sick leave bank for prenatal care, with employees able to receive an additional 20 hours of paid sick leave for prenatal care in addition to the existing sick leave while creating financial incentives for hospitals to reduce the number of unnecessary C-sections. The budget also eliminates cost-sharing for certain pregnancy-related expenses, such as prenatal and postpartum visits, for Essential Plan and Qualified Health Plan enrollees.

Co-pays are being eliminated for insulin for any New Yorker on a state-regulated health insurance plan. The proposal is estimated to save New Yorkers an estimated $14 million in 2025 alone.