President Biden’s pledge to eliminate medical debt at a rally earlier this month was well-received by advocates and will likely attract many indebted voters — but it won’t be easy, given that Americans currently owe about a quarter of a trillion dollars in medical debt. .
Earlier this month in Detroit, Biden issued his campaign promise during a speech in which he laid out his plans for his first 100 days in office, should he be re-elected for a second term.
“Let’s end medical debt. By this I mean that we have already ensured that medical debts can no longer be included on your credit report. You can settle medical debt for pennies on the dollar,” Biden said.
Although he did not specify how this would be done, his comments are reminiscent of the work of the nonprofit Undue Medical Debt, which buys medical debt and relieves patients of having to pay it back.
“I and the entire Undue Medical Debt team are excited to see this uniquely American crisis getting the attention it deserves from policymakers at the federal level – and at all levels of government,” said Allison Sesso, president of Undue Medical Debt, when asked about Biden’s comments.
Sesso’s organization works through partnerships and campaigns at local level, negotiating with local hospitals willing to sell their debt. Municipal and state governments across the country have federal dollars leveraged to alleviate residents’ medical debt, but it remains unclear whether the federal government could do this for the entire country.
Undue medical debt has alleviated nearly $12 billion in medical debt since 2014. Nationally, Americans owe about US$220 billion in medical debt.
“It’s still too early to talk concretely about what it would be like to end medical debt in a second Biden term,” said Sesso. “We are open to working closely with this and future administrations to advise on policy solutions and leverage our unique national model in a way that is effective and additive.”
Since taking office, the Biden administration has taken steps to address the impact of medical debt, the most significant of which has been preventing the inclusion of medical debt on credit reports, with administration officials arguing that medical debt is not a good indicator of someone’s creditworthiness.
While this measure has the potential to help people more easily obtain auto loans or mortgages, it does not resolve existing debt or prevent future medical debt from incurring.
Sesso said that “federal policymakers must address upstream policy changes to make health insurance more comprehensive and affordable for all and balance the needs of health care providers.”
Biden’s stated goal of eliminating medical debt echoes promises he made during the campaign in 2020, when he pledged to eliminate student debt. The administration announced Thursday that it would forgive another $1.2 billion in student loans, primarily benefiting teachers, nurses, law enforcement and first responders.
His administration’s efforts on student loans during his first term were tense and entangled in legal battles. A federal appeals court recently blocked Biden’s student loan repayment plan, halting all aspects of the plan for now. These legal battles are possibly foreshadowing what a federal medical debt elimination plan might face.
Forgiving outstanding student loans, most of which are federally owned, is entirely different from eliminating medical debt, which most often comes from the private sector.
“One of the big distinctions is that there was a problem, and probably still is a problem, with student loans,” said Joseph Antos, a senior fellow on health care and retirement policy at the right-leaning American Enterprise Institute. “Because the government guarantees the loans and the loan processors. It’s all part of a federal process, and so the federal government has some real responsibility for this. In the case of medical debt, that is purely the private sector.”
According to Antos, even approaching the idea of eliminating medical debt is “incomprehensible” in terms of the operational hurdles that would have to be overcome.
“There are certain operational difficulties,” said Antos. “Only the mechanical aspects of this [are] kind of incomprehensible. And the age-old question is: what is the fair amount of medical debt you should owe? An end to all medical debt would have to be defined, and in the end there will always be some associated debt, at least for a short period of time, where you will be personally responsible for paying something.”
The White House referred questions about Biden’s specific plans for his campaign, which did not immediately respond to a request for comment.
Antos theorized that a plan to resolve medical debt at the federal level could take the form of expanded subsidies, though he expressed doubts about either approach being plausible given the immense complexity of the U.S. healthcare payments system.
“I think from a practical standpoint it would be very complicated and would end up alienating the voter base that Biden is really trying to attract,” Antos said. “And it would also lead to bad behavior. If you want to have your medical debt covered, why should you buy insurance? Why not just accumulate medical debt?”
This story originally appeared on thehill.com read the full story
