By Hochul Press Office | December 13, 2023

Legislation S.608C/A.5653B Prohibits Selling Medicine for an Unconscionably Excessive Price During a Drug Shortage

Legislation S.4907A/A.6275A Prohibits Hospitals, Health Care Professionals and Ambulances from Reporting Medical Debt to Credit Agencies

Legislation S.5941B/A.3245D Requires Companies to Notify Customers of Automatic Subscription Renewals and to Provide Clear Instructions for Canceling

Legislation S.1048A/A.2672B Clarifies that Merchants Must Post the Highest Price a Consumer Might Pay for a Product Regardless of Payment Methods

Governor Hochul today signed legislation to protect New York consumers from medicine price-gouging and ongoing financial consequences related to medical debt. Additionally, the Governor signed bills what will curb predatory subscription services, and confusion over the price of many goods and services. Legislation S.608-C/A.5653-B prohibits the sale of medicine for an unconscionably excessive price throughout a drug shortage. Legislation S.4907A/A.6275A prohibits hospitals, health care professionals and ambulances from reporting medical debt to credit agencies. Legislation S.5941B/A.3245D requires companies to notify customers of automatic subscription renewals and to provide clear instructions for canceling said services. Legislation S.1048A/A.2672B clarifies that merchants must post the highest price a consumer might pay for a product, regardless of payment methods.

“As costs and inflation continue to creep up, consumer protection is one of the ways that our state is giving New Yorkers more purchasing power and keeping hard-earned money in their pockets,” Governor Hochul said. “This legislation will help to protect individuals struggling with medical debt, unwanted subscriptions, and confusion over prices at the register. No one should have to jump through hoops to protect their finances and today we’re taking steps to help New Yorkers on their journeys toward financial freedom.”

Legislation S.608C/A.5653B prohibits the sale of medicine for an unconscionably excessive price during a drug shortage (as declared by the U.S. Food and Drug Administration). Generally, an “unconscionably excessive price” may include a gross disparity between the price being charged by the seller during the abnormal disruption of the market, and the price charged immediately prior.

Assemblymember Karines Reyes, R.N. said, “I applaud Governor Hochul for signing this pivotal legislation today. As a health care professional and the representative of a community with a high population of seniors, I am well aware that the cost of prescription drugs is egregiously high. This legislation tackles the affordability and access crisis in health care by allowing New York State to sue and penalize entities that engage in the price gouging of medicines, due to drug shortages. This new law will allow state officials to analyze, identify and engage bad actors that seek to excessively profit off of high prescription drug prices, leaving seniors, the disabled and the most marginalized without sorely-needed medicine or an ability to pay their other bills. I appreciate Governor Hochul and Attorney General James for their leadership on this issue and look forward to this law’s implementation.”

Legislation S.4907A/A.6275A prohibits hospitals, health care professionals and ambulances from reporting an individual’s medical debt charged to a medical card to credit agencies. A medical card is a credit card offered by providers specifically for the payment of health care services, products, or devices.

According to a 2023 study from the Urban Institute, 740,000 New Yorkers have medical debt on their credit reports with people of color twice as likely to have medical debt referred to a credit bureau and low-income people three times more likely. By prohibiting hospitals, health care professionals, and certified ambulances from reporting medical debt to credit agencies, this legislation will make it easier for New Yorkers to get jobs, secure credit, rent an apartment, pay for their children’s education and build long-term wealth.

State Senator Gustavo Rivera said, “I am so grateful to Governor Hochul and our coalition for standing together to relieve New Yorkers from the burden of medical debt’s impact on credit reports. The Fair Medical Debt Reporting Act will stop medical debt from damaging patients’ financial stability and mitigate the fear of seeking medical care due to cost in our most vulnerable communities. I look forward to working together to eradicate medical debt and ensure quality, affordable healthcare for every New Yorker.”

Assemblymember Amy Paulin said, “Today is a victory for New Yorkers with the signing into law of three of my consumer protection bills. Legislation S.4907A/A.6275A addresses the immense problem of medical debt affecting thousands of New Yorkers. This new law will prohibit medical debt from being collected or reported by a consumer reporting agency. We must protect patients from being punished for doing the right thing: taking care of their family member’s physical and mental health.”

State Health Commissioner Dr. James V. McDonald said, “Governor Hochul’s actions prohibit medical debt from being collected from a consumer protection agency or included as a part of a consumer report, which has disproportionately affected older New Yorkers and persons of color. This legislation addresses the toll medical debt has taken on individuals’ financial security and is a significant step toward protecting all New Yorkers from medical debt and providing them the financial freedom they deserve.”

AARP New York State Director Beth Finkel said, “This new law will remove obstacles to New Yorkers’ ability to buy homes, get loans or save for retirement. No one should risk putting their financial future in jeopardy by getting the medical care they need, and AARP New York applauds Governor Hochul for signing this bill. Prohibiting medical providers from sending medical debt to credit reporting agencies will especially help older New Yorkers, whose income often decreases while their medical expenses increase – and whose numbers are growing fast. Plus, older Black and Hispanic/Latino families face much higher debt burdens than older white families. We thank bill sponsors Senator Gustavo Rivera and Assembly Member Amy Paulin and their respective houses for passing this legislation earlier this year and making this new law possible.”

Community Service Society of New York President and CEO David R. Jones said, “Governor Hochul has shown tremendous leadership in tackling the state’s medical debt crisis, having enacted four bills into law in the past two years, including legislation banning healthcare providers from placing liens on patients’ homes and garnishing their wages in medical debt collection cases. By signing the Fair Medical Debt Reporting Act today, the governor is making it clear that protecting New Yorkers from predatory medical debt collection practices that can cause financial ruin for consumers continues to be a priority for her Administration.”

Legislation S.5941B/A.3245D requires businesses to notify consumers of an upcoming automatic renewal or a continuous service charge 45 days prior to the charge. It also requires businesses to include instructions for how to cancel automatic renewals or continuous service charges as part of the notice to the consumer.

State Senator Brian Kavanagh said, “Most New Yorkers pay for at least one service through a subscription model. These services include digital entertainment, recurring meal delivery services, and exercise and diet programs. While these services may be convenient and accessible, many businesses have adopted deceptive subscription marketing practices that make it very easy to sign up but far more difficult to cancel. Oftentimes, users unknowingly agree to automatic renewals, leading to unknown and unwanted charges. This legislation requires a business to notify a consumer of an upcoming automatic renewal or continuous service charge 15 to 30 days prior to such charge, and to include instructions on how to cancel the subscription. This legislation will ensure transparency from subscription service companies and help protect New Yorkers from deceptive marketing practices that these companies often utilize. I thank Assemblymember Amy Paulin for championing this bill in the Assembly and Governor Kathy Hochul for signing it into law.”

Assemblymember Amy Paulin said, “Legislation S.5941B/A.3245D requires businesses to notify consumers of an upcoming automatic subscription renewal charge at least 15 days prior to the charge. As our ‘subscription economy’ has continued to grow, people are often paying for subscriptions that they no longer use without realizing it. Compounding the issue is that businesses have adopted deceptive subscription marketing practices which make it very easy to sign up and much more difficult to cancel. This legislation will provide transparency and help protect New Yorkers from continually paying for things they don’t use or want.”

Legislation S.1048A/A.2672B requires businesses to clearly post the highest price that a consumer might pay for certain transactions, including any surcharges. The legislation also establishes a civil penalty of up to $500 per violation.

Businesses in New York are permitted to offer two-tiered pricing systems in which the credit card price for certain sales transactions is posted alongside the cash price. By requiring businesses to post the highest price that a consumer might pay, this legislation helps to promote transparency and ensure that consumers are informed about their purchases.

State Senator Jeremy Cooney said, “Transparency in pricing is critical so people can make informed decisions when spending their hard-earned money. Requiring businesses to disclose credit card surcharges helps consumers better understand the total cost. Thank you Governor Hochul for signing this legislation and others to protect consumers.”

Assemblymember Amy Paulin said, “Legislation S.1048A/A.2672B protects New Yorkers from hidden surcharges by requiring sellers to clearly post the price of a credit card surcharge. Credit card surcharges now have to be disclosed clearly so that customers are fully aware of them upfront and not just when they go to pay. This legislation is about transparency, fairness and preventing consumers from being misled when making purchases using credits cards. I thank Governor Hochul for taking these important steps to protect New York consumers.”