Is Sanders’ plan to erase $81 billion in U.S. medical debt really all that crazy?

bernie-225x300Critics have attacked Sen. Bernie Sanders for his proposal to wipe out $81 billion in medical debt, including by changing rules around debt collection and bankruptcy. He also called for “replacing the giant credit reporting agencies with a ‘public credit registry’ that would ignore medical debt when calculating credit scores,” reported the New York Times.

Well, there he goes again, with interesting but hard to execute ideas, critics replied to Sanders’ medical debt idea, dissecting it to pieces.

But dig into some of the news articles and important realities flare up. Even his critics concede that medical debt has become a nightmare for too many Americans, contributing in unacceptable fashion to family stress and anxiety and, more importantly, adding to the nightmare of medical bankruptcy.

Only in America is medical debt such a burden on the citizens of an otherwise wealthy country.

As the Washington Post reported:

“Medical expenses are a contributing factor in two-thirds of individual bankruptcy filings. In a 2016 Kaiser Family Foundation poll, more than a quarter of U.S. adults ages 18 to 64 said they or someone in their household had problems paying medical bills in the past year.”

Here’s another fascinating aspect of the financial challenge of medical debt: That $81 billion figure Sanders flashed might not be as fearsome to eliminate. As the New York Times reported:

“While eliminating every American’s medical debt would probably not come cheap, Mr. Sanders’s plan could wind up costing far less than the total amount of debt he is seeking to cancel. Craig Antico, a founder of the charity RIP Medical Debt, which buys and forgives medical debt, estimated that the market price for $81 billion in debt could be as low as $500 million. Most past-due medical debt never gets paid, which is why bill collectors are often willing to sell the debts for pennies on the dollar.”

Indeed, what are ordinary consumers to make of eye-popping recent news media investigations that have prompted storms of criticisms for hospitals and their overzealous debt collection practices? Institutions clog courts to pursue poor patients, including their own employees, for years over unpaid medical bills, sums that profit-maximizing administrators say add up to tens of millions of dollars.

But just how righteous can hospitals’ claims be — and how seriously can they be taken — when nonprofit institutions wilt in the public spotlight, and, poof, they magically decide they don’t need to chase down and ruin thousands of their patients for what officials had insisted were debts that had to be repaid. Maybe if hospitals — and Big Pharma — “spitball” the cost of their products and services, maybe they also could take more than a smidge less than their sky-high prices? Maybe their quest for maximal profits could consider patients and consumers more — and not just what they can wring from markets?

By the way, just to be a devil’s advocate about the $81-billion sum that Sanders called out — that just happens to be the same sum that the $718 billion Pentagon budget will be allowed to increase by in just one year. And if $500 million is the amount that actually would be needed to wipe out a huge chunk of Americans’ medical debt, well, everyone loves music and a marching band. But taxpayers forked out that amount in 2016 alone for 136 military bands maintained by the Department of Defense, employing more than 6,500 full-time professional musicians. (That $500 million sum, by the way, is small in the giant federal budget, but the Trump Administration would like to excise that amount for food stamps, a cut that would harm the food security of 3 million Americans, including children.)

In my practice, I see not only the harms that patients suffer while seeking medical services, but also their struggles to access and afford safe, efficient, and excellent medical care. This has become a huge challenge due to the soaring cost, complexity, and uncertainty of treatments and prescription medications, too many of which prove to be dangerous drugs.

Voters in the 2020 campaign need to consider closely the candidates for public office, asking, for example, why the Republicans in Congress and the White House thought it was a great idea to give more than $1 trillion in tax breaks to wealthy corporations and the richest Americans. They did so, even as the rest of us drown in debt, including for medical care. Democrats have generated many plans to help families with the skyrocketing cost of higher education and the crushing debt that they take on to get their kids into what they hope will be life changing schools.

The burdens of bills owed, including for health care, cannot be dismissed for too many Americans, though the New York Times reported a harsh critique of some Sanders’ data:

“The Sanders campaign circulated statistics suggesting that more than 500,000 Americans declare bankruptcy each year because of medical bills. That number, derived from a survey of bankrupt individuals, overstates the impact of medical bills on bankruptcy. The study itself noted that health problems can cause bankruptcies in two ways, through direct medical bills and through lost income due to illness itself. The 500,000 figure includes both groups. Other research has shown that income losses due to illness are often the bigger financial hit than medical bills. “

OK, but will politicians hear and help their constituents drowning in bills and barely getting by, even if they may be pulling in reasonable or even handsome pay? Study the information available and please get as ready as possible now to get out and vote.

Photo credit: ©Creative Commons, Gage Skidmore
Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
Washingtonian Top Lawyer 2011
Avvo Rating 10.0 Superb Top Attorney Best Lawyers Firm
Contact Information