S Carolina law allows tax refund seizure over medical debt
CHARLESTON, S.C. (AP) — A South Carolina law meant to help the government collect debt is being used by hospitals to seize the tax refunds of people with unpaid medical bills.
The Post and Courier reports health organizations took at least $92.9 million in more than 172,000 seizures in 2017.
The newspaper’s investigation of the Setoff Debt Program found it effectively allows hospitals to use the Department of Revenue as a debt collector.
The state benefits by tacking on a $25 debtor fee to each seizure, collecting a total of $12.6 million in 2017. The South Carolina Association of Counties, a lobbying group for county governments, also collects $25 for processing each claim.
Unpaid medical bills are the largest drivers of debt and bankruptcy for South Carolina’s poorest people.
Information from: The Post and Courier, http://www.postandcourier.com