Bernie Should Cancel Medical Debt, Too

Even more so than student debt, medical debt is a manifestation of everything that’s wrong with the United States today. Bernie Sanders, and the broader democratic socialist movement, should be calling for its abolition as well.

One in three Americans carry medical debt, and it's the leading cause of bankruptcy in the United States. Images Money / flickr

Bernie Sanders’s 2020 presidential campaign is picking up right where he left off in 2016. His stump speeches remain the classic Sanders jeremiad against inequality and exploitation he’s been honing for forty years. And transforming US health care by establishing the most comprehensive single-payer system in the world remains his signature issue and rallying cry.

This time around, Sanders also boasts the first successful use of the War Powers Resolution to constrain US support for Saudi Arabia’s war on Yemen, and he has committed to working toward enfranchising incarcerated citizens. But the most significant addition to Sanders’s 2020 campaign is his plan to eliminate student loan debt.

Following Warren’s announcement of a means-tested student-debt cancellation plan, estimated to cost $640 billion, Sanders sponsored legislation to eliminate all the outstanding $1.6 trillion in student loan debt. This policy adds a massive new spending program, second only to M4A (Medicare for All), to Sanders’s platform.

The plan has set off a flurry of debate. Progressives have marshaled serious arguments on both sides. However, Sanders and Warren have already committed to their respective versions of student loan forgiveness, and it will likely continue to play a central role in their campaigning. It also remains popular with Democratic voters. But as long as they’re on a jubilee kick, there is a politically attractive and distributively progressive debt-cancellation plan they could advance, namely a call to get rid of outstanding medical debt.

For Sanders in particular, who has made the injustice of the US health care system the center of his campaign, medical debt cancellation would be a conceptually coherent addition to his plan for health justice.

The Case for Cancellation

One in three Americans carry medical debt, and it’s the leading cause of bankruptcy in the country. The Affordable Care Act has done nothing to reduce the number of medical bankruptcies. This is unsurprising, since out-of-network fees, deductibles, and co-pays ensnare even those with insurance. Despite the immense burden of medical debt, especially for the working class, families with disabled members, and the young, the absolute amount is miniscule compared to the fiscal capacity of the federal government.

A 2018 study in Health Affairs estimated the total amount of past-due medical debt at $81 billion. Though the total amount of medical debt is much larger, even eliminating delinquent debt would be a huge relief to millions of vulnerable people. And it comes at a fraction of the cost of student-loan-debt cancellation and could easily be rolled into a Medicare for All bill.

The distribution of medical debt burden reveals the acute failures of the US health-care system. The largest share of this debt, at 11 percent, is held by twenty-seven-year-olds, a perverse effect of having  just been kicked off their parents’ health insurance plan. The current policy mix of parental coverage up to age twenty-six and employer- or exchange-based insurance disadvantages young people, who are more likely to work in entry-level positions with no or subpar insurance, and, owing to their smaller incomes, to select high-deductible plans with narrow networks. It is unsurprising, then, that medical indebtedness is higher for those between the ages of twenty-seven and forty-five.

High levels of medical indebtedness also disproportionately affect those with chronic conditions, such as diabetes, that require long-term treatment. Even a short spell of uninsurance, which affects 50 million Americans per year, could lead to a huge swell of debt for those with chronic conditions.

An Outrage in Need of Redress

Medical-debt cancellation faces some of the same distributive challenges of a student-loan cancellation plan. It does not help those who have foregone medical treatment not to incur debt, or those who have paid off their debt. Both these groups have been made worse off by the current health-care system. But unlike student-loan-debt cancellation, the rationale for canceling medical debt is far easier to grasp. The vast majority of medical-debt holders are disabled, unemployed or underemployed, have chronic health conditions, or are otherwise marginalized. And unlike those who have completed a college education, medical treatment does not have income- or wealth-boosting benefits.

Medical debt in the United States is the story of a cancer survivor who lost her job, and therefore her insurance, because she had cancer and is driven into bankruptcy. It is the story of someone who purchases a gold plan from the Obamacare exchanges, but still ends up with a massive bill because the ambulance took him to an out-of-network hospital. Medical debt and its accompanying bankruptcy are a manifestation of everything that’s wrong with America’s health-care system.  Bernie Sanders, and the broader democratic socialist movement, should be calling for its abolition.