Medical-related debt is the top reason Americans file for bankruptcy. Sen. Bernie Sanders (I-Vt.) wants to erase much of that debt in his latest ambitious plan to reshape the country’s health-care system.
But the way he’s proposing to do so may be logistically unworkable — and wouldn’t necessarily benefit the people who need help the most, experts say.
Over the weekend, Sanders pledged that as president he would wipe out $81 billion in past-due medical bills reported to credit agencies such as Equifax. He’s also proposing to replace private credit agencies with a government-run one that ensures medical debt never hurts people’s credit scores.
“The very concept of medical debt should not exist,” Sanders said in a statement. “In the wealthiest country in the history of the world, one illness or disease should not ruin a family’s financial life and future.”
Medical debt does not exist in other major countries. When I am president it won't exist in the U.S. either. pic.twitter.com/xowKtNHgK1— Bernie Sanders (@BernieSanders) September 21, 2019
Top Sanders aide Warren Gunnels:
The U.S is the only major country on earth where you can lose your house, car or have your wages garnished because you can't afford to pay a medical bill. That's unconscionable & unacceptable. When Bernie is president we're going to #EliminateMedicalDebt. https://t.co/1KbhvAcufZ— Warren Gunnels (@GunnelsWarren) September 21, 2019
Nick Coltrain, politics reporter for the Des Moines Register:
Sen. @BernieSanders recounts hearing from a veteran in Carson City, Nev., who was suicidal over $100K medical debt. Calls medical debt unconscionable.— Nick Coltrain (@NColtrain) September 22, 2019
"This is the wealthiest country in the history of the world. If we were a poor country, I'd be telling you something else."
Sanders is right about this: Medical debt is a massive problem for Americans. That was true before the 2010 Affordable Care Act, and it remains a huge problem now.
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.
So it's not surprising many people hailed Sanders's proposal as a well-intentioned goal. The president of the American Federation of Teachers:
Medical debt is a huge problem. That's why nurses, including @minurses have fought to lower debt and have paid off the debt of patients. Glad to see @BernieSanders talking about medical debt as a part of his campaign. #AFTvotes https://t.co/tr6QSue7Y5— Randi Weingarten (@rweingarten) September 22, 2019
Larry Levitt, vice president at the Kaiser Family Foundation:
The proposal from Senator Sanders to eliminate medical debt illustrates that health policy is as much about financial security as it is about access to care.— Larry Levitt (@larry_levitt) September 23, 2019
Vox editor-at-large Ezra Klein:
Of the various kinds of debt you can eliminate, I think the case is strongest for medical debt. That's not a voluntary investment people are making in their future. It's, usually, a catastrophic interaction of bad luck and bad (or no) health insurance. https://t.co/dalUu9ZgNq— Ezra Klein (@ezraklein) September 23, 2019
Erasing $81 billion in medical debt would certainly be good for those who owe it. But it's a lot trickier than it sounds for the government to find it, the founder of a charity that buys and sells medical debt told me. And it wouldn’t wipe out the problem — not even close.
Craig Antico leads a charity called RIP Medical Debt, which negotiates with hospitals to buy medical debt. Because so many medical bills go unpaid — and the problem has only gotten worse as insurance plans have required increasingly high deductibles from patients — he’s typically able to buy debt for just pennies on the dollar.
That’s good news for Sanders’s ambitious plan. Antico estimates that buying $81 billion in medical debt might cost as little as $500 million for the federal government.
But to buy up that debt, the government would have to figure out which hospitals are owed the $81 billion reported to credit agencies. And that information is protected by strict privacy rules credit agencies must adhere to.
“It’s definitely a worthy goal to abolish this debt,” Antico said. “It’s how do you find it?”
Antico provided an example: If the government wanted to abolish medical debt for everyone who lives in, say, New York state, it would have to go to every hospital and doctor's group that might have cared for a state resident and engage in a separate negotiation with each of them. So finding who holds the debt reported to credit agencies is harder than it sounds.
"If Bernie Sanders came to us and said 'I need you guys to abolish $81 billion in debt,' he couldn't direct it to that particular group," Antico said.
Plus, only a small fraction of total medical debt — less than 10 percent, according to Antico's estimates — is actually reported to credit agencies. So even if the government succeeded in erasing the $81 billion estimate, hundreds of billions more would remain. That debt would continue hurting those who owe it, as they would be less likely to visit hospitals even in dire need.
And there’s this: Targeting only medical debt reported to credit agencies carries an inherent bias toward patients who have more financial means. Patients who are poorer and could benefit more from having medical debt erased tend to have less or no credit history. Antico's charity focuses on patients who need help the most by going to hospitals and asking to buy the debt of those who might have qualified for financial assistance and didn't receive it, or those who are in bankruptcy.
Sanders didn’t go into detail about how he would approach these questions in a web page detailing his proposal. He also consistently overstates the number of people who go bankrupt every year because they can’t pay their medical bills (my Washington Post colleague Salvador Rizzo awarded Sanders three “Pinocchios” for this claim).
But Sanders’s proposal does make more sense when you consider it in light of his other health-insurance ideas. Under his Medicare-for-all plan, Americans would no longer incur medical debt because everyone would be covered under a universal plan requiring almost no out-of-pocket payments upon getting medical care.
Sanders's vision is to erase outstanding medical debt so the slate could essentially be wiped clean under a new single-payer system, said David Himmelstein, a professor at CUNY’s Hunter College. Sanders has relied on research conducted by Himmelstein, who has worked on the topic with Sanders’s Democratic rival Sen. Elizabeth Warren (Mass.).
“If you’re saying that we’re gonna stop having financial ruin from medical bills in the future, it makes sense to say ‘let’s go back when the cost is relatively small and not let people be ruined by their medical debts from their past,” Himmelstein told me.
Yet, like Medicare-for-all, the proposal would undoubtedly meet with strong resistance from the behemoth health-care industry. Industry lobbyists argue that erasing medical debt would discourage Americans from purchasing health insurance, because they would be sheltered from it no matter what.
“Paying off everybody’s debts is great campaign rhetoric. As soon as you get into the details, a lot of things fall apart,” one industry lobbyist told me.
AHH: Black-market vaping products may be behind the mysterious lung illnesses that have sickened at least 530 people in 38 states and killed nine, our Washington Post colleagues Lena H. Sun and Rob Kuznia report.
“Many sick patients said they bought vape products containing THC, the psychoactive component of marijuana, on the black market, officials and clinicians said,” they write. “The biggest legal marijuana market in the world is California — and the black market there is three times as big, said David Abernathy, an executive with Arcview Market Research, a cannabis investment and market research firm.”
Recent changes to the ingredients in popular marijuana vaping devices could be the culprit, according to interviews with more than a dozen people working in the legal and illegal cannabis markets. California has tightened restrictions, making the product even scarcer on the black market. So illegal operators are using a thickening agent to dilute THC oil and stretch their supplies. One such agent — vitamin E acetate — has been the focus of investigations around the mysterious illnesses.
“No one product or substance, including vitamin E acetate, has been conclusively identified as the cause of the lung injuries. But vitamin E acetate has been found in THC products taken from sickened patients and tested by state labs and the FDA’s forensic lab, officials said,” Lena and Rob add.
— Meanwhile, a Centers for Disease Control and Prevention official told lawmakers there have been “hundreds” of new cases of the vaping-related disease reported to the agency in the past week.
CDC Principal Deputy Director Anne Schuchat told lawmakers on a House Oversight and Reform subcommittee that more than 100 people are working on the investigation and that the “identification of the cause or causes for the outbreak may take substantial time and continuing effort,” as CNBC’s Angelica LaVito writes.
She also suggsted people may want to avoid vaping products until more is known about what’s causing the illness.
“At this point I think caution in all products is recommended. It may not even be the THC or the nicotine. It may be the additives or substances that may be common. It may be the material is not labeled appropriately,” Schuchat said.
OOF: Massachusetts Gov. Charlie Baker (R) announced the state will ban all vaping product sales for four months, the toughest state crackdown issued in response to the vaping-related illnesses.
New York and Michigan have already announced bans of flavored products, and the Trump administration said its moving to set its own regulations to “clear the market” of flavored products. Massachusetts would go a step further by also temporarily halting sales of tobacco and marijuana e-cigarettes, as our Post colleague Hannah Knowles reports.
“The purpose of this public health emergency is to temporarily pause all sales of vaping products so that we can work with our medical experts to identify what is making people sick and how to better regulate these products to protect the health of our residents,” Baker said in a statement.
OUCH: An analysis from the Congressional Budget Office found a doctor-friendly approach to tackling surprise medical billing would deepen the deficit by “double digit billions,” the Hill’s Peter Sullivan reports. The analysis specifically examined the approach from Reps. Raul Ruiz (D-Calif.) and Phil Roe (R-Tenn.), that calls for an arbitration system in which insurers and providers would propose payment amounts and an independent third party would determine the "fairer" payment option.
In an email to a congressional office, Peter writes, the CBO said under Ruiz and Roe’s approach that if “payments to providers increased by 5 percent as the result of the policy, that change alone would result in a $15 billion increase in the deficit over 10 years.”
Meanwhile, the CBO has found the bipartisan bills that advanced out of the Senate Health, Education, Labor and Pensions Committee and the House Energy and Commerce Committee that use a benchmarking approach would save more than $20 billion over a decade.
— The Centers for Medicare and Medicaid Services announced premiums for Medicare Advantage plans are set to drop 14 percent in 2020 compared with 2019 and 23 percent compared with 2018. The $23 estimated average monthly premium for the plans for next year will be the lowest average monthly premium for Medicare Advantage plans since 2007, according to the agency.
The average monthly premiums for these plans have decreased by almost 30 percent since 2017. For next year, the average number of plans per county is set to increase from about 33 to 39 plans.
The agency noted more than a third of the approximately 60 million Medicare enrollees are enrolled in a Medicare Advantage plan and that the number of people in the program is set to increase to a record 24.4 million, up from the current 22.2 million.
In a statement, CMS Administrator Seema Verma sought to contrast the success of Medicare Advantage plans with Medicare-for-all proposals — “proposals for a total government takeover of healthcare, which would destroy options such as Medicare Advantage that seniors increasingly choose,” Verma said.
— Pharmaceutical companies are upping their lobbying efforts and spending millions on ads to try to stop drug pricing bills they worry will dull their pricing power and markedly reduce sales, the Wall Street Journal’s Peter Loftus reports.
Industry players are hoping to at least stop any proposals -- such as the effort to peg U.S. drug prices to prices paid by other countries -- from passing this year, assuming lawmakers will be less likely to advance any plans in an election year.
But the challenge for these drugmakers is their diminishing political capital as concerns about high drug prices extend across party lines.
"Industry executives and lobbyists are urging friendly lawmakers to pass legislation blocking the plans,” Peter writes. “They are also pushing administration officials to pursue measures that would pressure industry middlemen such as pharmacy-benefit managers to provide some relief on patients’ costs without directly curbing drugmakers’ pricing power.”
According to the Center for Responsive Politics, the Pharmaceutical Research and Manufacturers of America, the top trade group representing the drug industry, has spent $16.3 million on lobbying in the first six months of the year, compared to $28 million for all of last year.
— And here are a few more good reads:
- The House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies holds a hearing on international food assistance programs at USDA and USAID.
- The House Energy and Commerce Subcommittee on Oversight and Investigations holds a hearing on e-cigarettes.
- The House Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies holds a hearing about investments in medical research.
— In case you were wondering, here's how the impeachment process works: