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South Carolina hospitals collect unpaid bills via patients' tax refunds

Hospitals in South Carolina are allowed to siphon off millions of dollars a year from their poorest patients' tax refunds, to recoup those patients' medical debt, according to a a wild story by the Post and Courier.

How it works: The state Department of Revenue does the work, collecting a cut for themselves, resulting in health organizations taking at least $92.9 million via more than 172,000 seizures in 2017. A lobbying group is also involved, and also takes a chunk of money for itself, resulting in another fee tacked onto patients' debt.

The bottom line: Hospitals — including private ones — in South Carolina use the Department of Revenue as their debt collector, a practice replicated only in one other state.

  • Nearly a third of the state's residents under 65 have unpaid medical bills.
  • But unlike all but three other states, South Carolina prohibits hospitals from getting a court order to force employers to give them workers' wages as a way of settling medical debts.

Go deeper: Young people have the most medical debt