Vermont Senator and 2020 presidential hopeful Bernie Sanders just released a plan that would cancel approximately $81 billion nationwide in overdue medical bills. Given that Sanders is an enormous advocate of Medicare for All, it’s not too surprising that he wants to wipe out the medical debt that plagues so many Americans. While there’s some debate on how many people actually go bankrupt because of medical debt each year, it’s well-known that medical debt can and does ruin lives. And that’s, frankly, inhumane.
Let’s look into the details of his proposal.
Specifically, the senator’s plan seeks to clear medical bills that have gone into collections. The federal government would negotiate and pay-off medical debt that had been reported to credit agencies—it’s a little unclear if medical debt that was, say, placed on a credit card and was never paid, would fit in this sort of debt settlement.
Sanders also wants to remove medical debt from credit reports, which is a game-changer, especially for low-income people.
How and why? This would replace the private credit-reporting agencies we use now (such as Equifax) with a public registry. The public registry would exclude healthcare-related debts. The idea here is that your inability to pay for, say, hospital bills related to a broken leg shouldn’t be a factor in a landlord deciding to rent to you.
The plan also aims to ban the collection of medical debts beyond the statute of limitations, end abusive practices of debt collections (meaning: no more countless phone calls harassing you day and night), and limit what can be seized or garnished from your wages.
“It is immoral and unconscionable that families across the country are finding themselves nearly broke or bankrupt because of crippling medical debt while the health care industry made more than $100 billion in profits last year,” Sanders said in a statement. “My administration will take on the greed of the health care industry and end the epidemic of medical debt in America.”
Who has the most medical debt? Studies have shown that millennials carry more medical debt than older Americans. Studies also show that millennials incur medical debt more regularly.
A 2018 study, appearing in Health Affairs, suggests that one in six Americans have past-due medical bills on their credit report. About 53% of those bills were less than $600 each. Should people be denied housing or employment because of less than $600 in medical debt? No. (The big picture here, though, is that people shouldn’t be denied opportunities based on any amount of medical debt; the $600 marker just affirms how ridiculous it all is.)
Notably, 11% of people who had at least one medical bill in collections in 2016 were 27-years-old. Any guesses as to why? Probably because that’s the year after people lose the ability to stay on their parent’s health insurance. Mind you, not everyone even has the opportunity to be on a parent’s health insurance plan.
Medical debt is insidious. Within minutes (literal minutes, depending on what’s ailing you) sickness or injury can land you in an otherwise unknown mountain of debt. Medical debt is a recipe for long-term poverty, and hits especially hard for people who are most vulnerable; people who don’t have health insurance benefits at all, or whose policies come with high deductibles and little coverage. People who don’t have paid sick leave and get sicker before getting seen. People who are the only source of income in their home. People who are homeless and have no place to heal.
According to Reuters, the Sanders campaign confirmed he would pay for this proposal with a corporate tax. Specifically, he would tax corporations based on their pay for chief executives. The details are still a little murky there, but when we’re talking about Medicare for All and forgiving student debt, it’s entirely reasonable that we talk about how to free people burdened with medical debt, too.