FLORENCE, S.C. — Presidential candidate Bernie Sanders plans to release a new proposal to cancel $81 billion worth of medical debt Americans are struggling to pay off, adding to a suite of ideas that would represent the largest expansion of the nation’s social safety net in decades and likely cost tens of trillions of dollars.
The senator from Vermont is seeking the Democratic nomination on promises of enacting Medicare-for-all, wiping away student loan debt and aggressively combating climate change, initiatives that together would cost an estimated $48 trillion or more over a decade, a tally of campaign estimates shows.
Sanders has proposed paying for the programs with new taxes on wealthy businesses and individuals, as well as on middle class Americans.
While these ideas have won praise from leading liberal activists and analysts, the notion of new taxes has made some Americans — including prospective Sanders voters — nervous. And some economists warn that the sweeping proposals could pose risks to an already uncertain U.S. economy.
Sanders and his allies acknowledge the high price tag of his ambitious platform. They argue that not acting boldly will exact a larger cost on the country’s well-being in the long run, and that the United States can afford these changes and should feel compelled to act.
“We are in the wealthiest country in the history of the world. We are not a poor country,” Sanders said at a campaign stop in Myrtle Beach, S.C., on Thursday, a refrain he repeats often.
His latest proposal, which he teased at a town hall event here Friday, would spur the federal government to negotiate and pay off all past-due medical bills in collection that have been reported to credit agencies.
There are many yet-to-be-determined elements of the plan, such as how much it would cost and how it would be paid for. The campaign said Sanders plans to release the proposal in the next month.
“We are introducing legislation that would end all medical debt in this country,” Sanders told reporters here Friday after campaigning at an outdoor festival. “And the bottom line is, it is an insane and cruel system which says to people that they have to go deeply into debt or go bankrupt because of what? Because they came down with cancer or they came down with heart disease or they came down with Alzheimer’s or whatever.”
Cornell University economics professor Steven Kyle said the slate of programs and financing Sanders is pushing would likely boost local and national economies long term. But they also carry some risks.
By the time the general election nears next spring, Kyle predicted, “we’ll be in a recession.” Critics of the plans will say “that won’t be the time to raise taxes,” he added. “And they’ll have a point for a little while.”
More than any other issue, health care has been the focus for Sanders in his second White House run. He is an outspoken advocate of a Medicare-for-all system, under which the government would provide health insurance to all Americans in exchange for new taxes.
The senator has estimated that Medicare-for-all would cost $30 trillion to $40 trillion over 10 years, acknowledging it would require a tax increase on middle-class Americans. Sanders argues that Americans would come out ahead after savings from not having to pay private insurance premiums.
But at his town hall here Friday, Sanders encountered some skepticism. Scott Lenz, a 57-year-old manufacturing worker, told Sanders that like many people, he gets his health insurance through his employer, which pays most of his premiums. He doubted that he’d be in a stronger position under a new system when that cost shifts from employers to taxpayers.
“I’m not sure I’m going to come out better in that,” Lenz told the senator.
“I think you will,” Sanders replied. He asked Lenz whether he paid a deductible. Lenz said he did — $500 a year. And he incurs co-pays and prescription drug costs.
Sanders told him those costs would be “significantly reduced” under his plan and that unionized workers should benefit from employer savings. Lenz, who is from Patrick, S.C., still wasn’t ready to embrace the proposal.
“They’re definitely going to have a savings. I don’t see that translating into any benefit on me, honestly,” he replied.
In an interview afterward, Lenz said that he “was satisfied” with Sanders’s response and likes the idea of Medicare-for-all. But he said that if costs are shifted away from his employer, “I don’t know that I’m still convinced I’m going to be better off.”
Marc Goldwein, senior vice president and senior policy director for the nonpartisan Committee for a Responsible Federal Budget, said that new tax rates on the scale Sanders is proposing could hurt the economy. “There’s nothing inherently wrong about high spending and high taxes,” he said. “But there’s trade-offs involved.”
Sanders’s campaign said his medical debt plan is another way to help Americans deal with the crippling financial effect of health care.
Under the proposal, only people unable to pay their medical debt would be granted relief. Those keeping up with their payments would have to continue to pay. The proposal would also create a new legal framework to ensure that no credit scores are negatively affected by unpaid medical bills, the campaign said. And it would repeal parts of a 2005 bankruptcy bill.
Asked where it got the $81 billion figure, the campaign pointed to a study published in Health Affairs in 2018. Pressed further, the campaign declined to say how, specifically, the government would identify the debt in collections — whether it would do so on its own or rely on individuals to report it.
Sanders also has proposed eliminating all $1.6 trillion of student loan debt — a polarizing idea that has brought both praise and criticism. And he has championed making public universities and colleges tuition-free.
The Sanders campaign has said he would pay for these plans with a Wall Street tax that will bring in $2 trillion over 10 years. Some tax experts have projected lower revenue.
A recent Sanders climate change plan that would replace gas-guzzling vehicles with electric vehicles by 2030 and create other initiatives, would cost an estimated $16.3 trillion a year over a decade. Sanders advisers have said it would be funded by new revenue from electricity customers, new corporate taxes and cuts in military spending, among other things.
Sanders has also embraced other sweeping ideas such as a federal jobs guarantee and reforming agricultural regulations. One of his main presidential rivals, former vice president Joe Biden, has advanced more modest agenda, setting up a sharp contrast in the contest. Others have also lined up opposite Sanders.
“Folks I talk to don’t want everything for free they want a fair shot,” Montana Gov. Steve Bullock said in Iowa on Saturday.
Jeffrey Sachs, a Columbia University economics professor who advised Sanders in his 2016 run and supports him this time, said achieving ambitious goals on health-care, the environment and other matters are economically feasible.
“Our national income can do all of that,” he wrote in an email, “with a better distribution of income and a better allocation of responsibilities between the public and private sectors. In the end, the budget would be a higher share of GDP, and private consumption of healthcare and education would be much lower.”