Vermont Sen. Bernie Sanders has made it clear he wants to revolutionize health care by letting people see a doctor for no charge under his "Medicare for All" proposal. Now he wants to take their past-due medical bills off their hands, too.
It's the latest step in the 2020 Democratic candidate's quest to free consumers from what he describes as a "dysfunctional health care system" that ruins families' finances. The proposal, which is still in the works, would relieve consumers of an estimated $81 billion in medical debt and reform a 2005 federal bankruptcy law to make it easier to discharge such liabilities, according to Sanders' campaign.
It's widely accepted that medical debt is a problem, but Sanders has come under fire for some of his claims.
"500,000 people go bankrupt every year because they cannot pay their outrageous medical bills," Sanders told CNN's Brianna Keilar on State of the Union last month.
Sanders' statistic comes from a March editorial in the American Journal of Public Health written by David Himmelstein and Steffie Woolhandler, both doctors and longtime advocates of national, government-run health insurance system. They surveyed bankruptcy filers and found that two-thirds "very much agreed" or "somewhat agreed" that medical expenses or medical problems causing a loss of work contributed to their bankruptcy. That's equivalent to about 530,000 bankruptcies a year, the researchers said.
That figure has been challenged, but the Sanders campaign continued to defend the study on Thursday and called medical debt "an extremely serious issue."
The fact that Americans go bankrupt because they can't afford to pay their medical bills is "immoral" and "unconscionable," said Warren Gunnels, senior adviser to the campaign.
Whatever the number is, there's no doubt that many Americans are burdened by unpaid medical bills.
Some 46 million people had at least one unpaid medical bill that had been sent to a collection agency on their credit report, according to an analysis of 2016 credit report data published in the journal Health Affairs last year. That's about 16% of all consumer credit reports. The average debt was just under $600.
But that isn't an exhaustive list of all medical debt, said Benedic Ippolito, an economist at the conservative American Enterprise Institute who co-authored the Health Affairs report with economists from the Federal Reserve Board and the Consumer Financial Protection Bureau. Many consumers also try to pay off big medical bills by putting them on their credit cards or entering into payment plans with the health care provider.
Nearly a quarter of non-elderly adults had problems paying medical bills, according to a 2018 report from The Commonwealth Fund, a health policy think tank. Even some of those with health insurance struggled, with 18% having issues covering the charge.
Part of the reason is that many Americans now have health insurance plans with high deductibles that they have to satisfy before their coverage kicks in. The average deductible for a single worker was $1,350 last year, up from $433 a decade earlier, according to the Kaiser Family Foundation's Employer Health Benefits Survey.
Meanwhile, Americans' income hasn't kept pace, said Sara Collins, vice president for health care coverage and access at The Commonwealth Fund.
Some 14% of non-elderly adults with employer coverage said their out-of-pocket medical expenses equaled 10% or more of their family's income, the fund found. That's up from 6% in 2003. And about one-third said they would not have the money to pay an unexpected $1,000 medical bill within 30 days.
Also, many Americans are plagued by surprise medical bills, which often happens when they are seen by an out-of-network doctor in an emergency situation. Roughly one in six emergency room or in-hospital stays generated at least one out-of-network bill in 2017, according to a Kaiser analysis of claims data from large-employer plans, putting them at risk for an unexpected expense.
"Most families don't have lots of high out-of-pocket costs in a given year," she said. "But if they do, if you have an emergency room visit, most middle-income families just don't have the assets to pay that off."
Several bipartisan bills are working their way through Congress to address this issue.
Many people who have medical debt also have other financial troubles and fall behind on other bills too, Ippolito said. For some, it leads to bankruptcy, but it's hard to determine what was the main cause.
"Many people who went bankrupt had medical debts," he said. "But they also had all sorts of other debts."