In mid-September, Bernie Sanders released a proposal that would eliminate the $81 billion of outstanding medical debt, as well as provide protections for people with medical debt going forward.
One in six Americans has past-due medical debt according to a recent analysis in Health Affairs, making medical debt the most common type of debt in collections. This debt tends to be concentrated among younger people, with 11% of all debt held by 27-year-olds (possibly because this is the year after young adults are removed from their parents' health insurance). This problem has been especially salient recently after the New York Times reported that private equity firms have spent $28 million in dark money to defeat legislation that would stop price-gouging in the ER, and Kaiser Health News published a stunning expose of the debt collection tactics of the University of Virginia Health System. In the past six years, the health system “filed 36,000 lawsuits against patients seeking a total of more than $106 million, seizing wages and bank accounts, putting liens on property and homes and forcing families into bankruptcy.”
Sanders’ plan would address this situation by negotiating and paying off all medical debt currently in collections, and it would place restrictions on how aggressive providers and debt collectors could be in collecting it going forward. It would prevent past or future medical debt from being counted against a person’s credit score. And it would also make broader changes to our credit system, by creating a public credit registry to replace for-profit credit reporting agencies like Equifax, and rolling back a number of the elements of the 2005 bankruptcy bill, including some that made medical debt harder to discharge. Of course, under Sanders’ Medicare for All proposal, medical debt would never be an issue again, but this debt forgiveness proposal would help address the ongoing harm our health system has done to people, and provide protections for people until a comprehensive reform is enacted.
Sanders has not proposed a funding mechanism for the $80 billion dollar plan (correction: while the Sanders proposal on medical debt cancellation makes no mention of funding, the proposal for a CEO pay inequality tax suggests that the proceeds would go to cancelling medical debt). The cost of the plan is comparable to the yearly increases in the military budget that passed with overwhelming bipartisan support despite having no funding mechanism whatsoever. There is no real reason to require a funding mechanism for medical debt cancellation, but Data for Progress polled the plan with funding by a surtax on adjusted gross income over $200k per year. While it is not always required from a policy perspective, from the perspective of measuring public opinion, fully funding a proposal ensures that our results are robust and will hold up in the face of (potentially dishonest) attacks from opponents. The full question wording reads as follows:
Democrats proposed spending $80 billion to forgive all past-due medical debt, which includes hospital bills and other medical fees. The medical debt forgiveness would be financed by a tax of 4 percent on people with incomes that are over $200,000 per year.
Democrats say that medical debt is a leading cause of bankruptcy and that debt forgiveness would provide relief to families who are burdened with medical bills and struggling to make ends meet.
Republicans say that debt forgiveness is unfair to people who have already paid their bills and that taxpayers should not be forced to pay for medical bills for well-to-do families who are able to pay on their own.
Do you support or oppose forgiveness of medical debt?
Overall, the policy garners net positive of about 10 percent support among registered voters, net 59% among Clinton voters, and net -41% among Trump voters.
Partisanship plays a major role in public opinion on this policy. Democrats strongly favor relieving medical debt, Republicans strongly oppose it, and Independents are statistically split. The share of voters who are unsure how they feel, about 13 percent overall and in the 10-15 percent range for partisan subgroups, is about normal for a policy of this kind in which the partisan cue is reasonably clear (i.e., Democratic voters probably know where their party stands on matters of debt relief, as do Republican voters).
Overall, voters are not deterred by the costs of debt cancellation, nor are they deterred by Republican arguments about debt cancellation being unfair to those who have already paid their medical bills or the (false) assertion that cancellation would help people who are already able to pay on their own.
Canceling past-due medical debt would provide immediate relief to millions of struggling families. Public support is robust to partisan attacks, and there is no excuse for anyone in the Democratic party to give anything less than full backing to this proposal.