Harris wants to forgive medical debt for millions of Americans Around 1 in 5 U.S. households reported carry the debt
Vice President Kamala Harris is calling for the forgiveness of medical debt for millions of Americans
Vice President Kamala Harris wants to forgive medical debt for millions of Americans.
The economic plan Harris rolled out last week notes that the Democratic presidential nominee and her running mate, Minnesota Gov. Tim Walz, would work with states to relieve people of their medical debt and "to help them avoid accumulating such debt in the future, because no one should go bankrupt just because they had the misfortune of becoming sick or hurt."
Some 15 million Americans have medical bills on their credit reports, according to Consumer Financial Protection Bureau research published in April. People in the U.S. owe at least $220 billion in medical debt, a February KFF analysis found.
"Medical debt affects an enormous number of people, so it's an issue that resonates with voters," said Larry Levitt, executive vice president for health policy at KFF.
Indeed, 51% of adults say it is extremely or very important for the federal government to forgive medical debt, compared with 39% who said the same about student loan debt, according to a May poll conducted by the University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research. The groups surveyed 1,309 adults.
"Vice President Harris may see student loan forgiveness and medical debt forgiveness as both addressing inequities that prevent people from achieving the American dream," said higher education expert Mark Kantrowitz.
The Harris campaign did not respond to a request for comment.
Former President Donald Trump hasn't come out with a medical debt cancellation proposal, but as president he pushed for more price transparency for patients and to curb surprise medical bills.
The Trump administration also tried but failed to repeal the Affordable Care Act. Overturning even portions of that law would lead to more Americans becoming uninsured and higher premium costs for policyholders, according to an estimate by the Congressional Budget office.
Harris differentiates herself with focus on medical debt
By coming out with a medical debt forgiveness plan, Harris may be looking to differentiate herself from President Joe Biden and his student debt efforts, said Braxton Brewington, press secretary for the Debt Collective, an organization that advocates for debt cancellation.
Biden has forgiven more student debt than any other president.
"She has the freedom to move into another space," Brewington said, adding that Harris would likely continue Biden's work on student debt, as well.
"I'm sure she'll do both," he said.
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The American health-care system has long been on Harris' radar.
As a presidential candidate in 2020, Harris pushed for a version of Medicare For All, a plan she no longer backs as she shifts to the center of her party. But Harris continued to show a concern with health-care costs as vice president, leading a White House effort in June to clear medical bills from Americans' credit reports.
This focus may come, in part, from her own experience.
In a 2019 interview with late activist Ady Barkan, Harris described the day her mother informed her she had cancer.
"My mother, she said to my sister and me, 'I want to meet you guys for lunch,' and she showed up at the restaurant wearing makeup — my mother never wore makeup, and her hair was blow dried," Harris said, tearing up. "She took our hands, and she'd said she'd been diagnosed with colon cancer.
"That was one of the worst days of my life, truly."
That families experiencing this "would also have to worry about how to pay the bills," Harris told Barkan was "just inhumane."
Harris's mother, who was a cancer researcher, died in 2009 at 70.
How medical debt could be canceled
Harris' economic plan didn't include specific details on how the medical debt jubilee would happen, but experts say an investment by the government would go far.
"Amazingly, medical debt can be bought from collection agencies for a penny on the dollar, a reflection of the fact that so few people can afford to pay their overdue medical bills," KFF's Levitt said.
Allison Sesso, president and chief executive officer of Undue Medical Debt, a nonprofit that partners with local governments to cancel people's medical debts, said the group can usually wipe out around $1,000 of the debt for every $10. It often buys the debt directly from hospitals, Sesso said.
States, counties and cities across the U.S. are already using funds from the American Rescue Plan passed during the Covid pandemic to purchase and eliminate around $7 billion in medical debt for roughly 3 million Americans by the end of 2026. As many as 1 million residents in Arizona could benefit, for example, and 400,000 people in New Jersey, according to the White House.
Medical debt affects an enormous number of people, so it's an issue that resonates with voters.Larry Levittexecutive vice president for health policy at the Kaiser Family Foundation
Recent research has raised some doubts about the benefits of forgiving medical debt. The relief has no impact on people's mental health, credit access or financial distress, according to a National Bureau of Economic Research study published in April.
Experts say this may be due in part to the fact that, beginning last year, the major credit reporting companies cleared most medical collections under $500 from people's records. Those past-due bills are now less likely to affect people's credit. Harris is now trying to get even more, if not all, medical debts off people's credit reports.
However, Sesso said Undue Medical Debt hears from people all the time about how canceling their medical debt improved their lives. In extreme cases, unpaid medical bills can lead to wage garnishments and seized assets, she said.
Frequently, people who still owe a hospital or doctor a bill will avoid necessary treatments, she said.
"People don't go back to the doctor because they feel they'll be asked for the bill," Sesso said. "And then the problem gets worse, and the interventions much more expensive."
This story originally appeared on: CNBC - Author:Annie Nova
