Progressive members of Congress led by Senator Bernie Sanders have spearheaded a policy proposal to eliminate medical debt in the U.S. They recently introduced a bill to eliminate America’s $220 billion medical debt and change the way medical debts are handled in the future.
The Scale of Medical Debt in America
Approximately 20 million Americans owe money for medical expenses. The Census Bureau revealed that over 14 million individuals hold over $1,000 in medical debt, and 3 million people owe more than $10,000.
Sanders’ Statement on Medical Debt
Senator Sanders has been outspoken for years on this issue, stating that individuals suffering from cancer and other medical conditions should not face financial ruin in attainment of their healthcare. According to Sanders and his progressive colleagues supporting this latest initiative, healthcare is a human right rather than a privilege. Sanders is leading the debt elimination bill as a step toward his progressive ideal.
Legislative Details of the Proposed Bill
Specifically, Sander’s proposed legislation would create a federal grant program that could be applied to canceling all existing medical debt. The grant would target resource-limited healthcare providers who provide medical care to underserved, vulnerable populations.
Implementation Timeline of the Bill
If the bill is enacted, the timeline for canceling medical debts would start one year after it was signed into law. In the proposal, debts owed to hospitals would be cleared within the first year of the bill’s passage. The next year, all forms of medical debt would be forgiven.
Legal Protections Against Medical Debt Collection
If the bill were to pass, it would become unlawful to collect any medical debt acquired before the bill was passed. Finally, the bill permits a right of action for patients, which will allow patients to seek redress for violations of the new act.
Public Opinion on Medical Debt Relief
According to progressives, there is widespread and bipartisan support for efforts to relieve medical debt. A YouGov poll claims that two-thirds of Americans across both major parties support medical debt relief or forgiveness in some form.
Challenges and Criticisms of the Bill
Although there may be widespread support for efforts to cancel medical debts, legislation proposing to do so, specifically from Senator Bernie Sanders, will be a difficult piece of legislation to get across the finish line.
Aside from the ideological issues many Republicans and mainline democrats will have with a “Socialist” sounding proposal, the proposal also begs the question of sustainability, as a one-time cancellation without ongoing solutions to prevent medical debt from accumulating again in the first place will not be seen as a financially sound solution to the problem.
Potential Economic Impact
There are many layers to consider when determining the impact of this proposal. On one hand, those who owe debts would experience the positive effect of improved credit scores and the relief of a major point of stress. Others would be impacted as well, and it remains unclear exactly what the effect might be for healthcare providers, insurers, and the economy overall if a large sector of debt was eliminated over a few short years.
Impact on Credit Reporting
One element of the legislation involves removing medical debt from credit reports. This would instantly improve the credit scores and financial standing of millions of Americans. Having a better credit score and a reduced debt burden are large factors involved in getting better terms on a home mortgage or securing loans.
Future of Medical Debt Accumulation
In addition to eliminating existing medical debt, Senator Sanders’s bill purportedly limits future debt accumulation. If this proposal is not effective, and its mechanism is unclear, it could be expected for the current situation to repeat itself in a number of years, and Americans would once again find themselves laden with medical debt.
Support from the Healthcare Community
Various healthcare groups have endorsed Sanders’s bill. These advocacy groups cite the financial burdens felt by patients who are already sick and in need of care. These same groups advocate for greater access to healthcare for underserved communities and populations.
Political Path Forward
In order for the new bill to pass, the effort would have to find a champion in the House and gain many co-sponsors in both the House and Senate. While this bill may be popular with some groups of Americans, others are unlikely to support the bill for various ideological reasons.
Conservative Arguments Against Canceling Medical Debt
Conservatives would agree that medical debt is a problem but that the reason for the high cost of medical care is due in part to the Affordable Care Act and the requirement that insurers allow all individuals, even high-cost and high-needs individuals, on the insurance rolls.
