Vermont Sen. Bernie Sanders backs bill eliminating medical debt

U.S. Sen. Bernie Sanders, joined by colleagues in the U.S. Senate and House, is sponsoring a bill that would wipe out the approximately $220 billion in medical debt that’s held by millions of Americans.

The bill introduced Wednesday also would remove the debt from credit reports and “drastically limit the accrual of future medical debt,” according to a statement that Sanders’ office released Wednesday.

The Vermont independent is joined on the bill by U.S. Sen. Jeff Merkley, D-Ore., and Democratic U.S. Reps. Ro Khanna, of California, and Rashida Tlaib, of Michigan.

“No one in America should face financial ruin because of the outrageous cost of an unexpected medical emergency or a hospital stay,” Sanders said in a statement. “The time has come to cancel all medical debt and guarantee health care to all as a human right, not a privilege.”

More than a quarter (27%) of all working-age adults nationwide owe $500 or more in medical debt, and 15% have medical debt of $2,000 or more, Sanders’ office said.

“Patients should be able to get the care they need when facing illness or injury without fear of financial ruin,” Merkley said in the joint statement. “America’s medical debt crisis continues to harm millions, and Congress must do all it can to relieve patients of this tremendous burden.”

As it’s currently written, the legislation would:

• [Make] “it illegal to collect medical debt incurred prior to the bill’s enactment and creating a private right of action for patients;” 
• Wipe “medical debt from credit reports by preventing credit reporting agencies from reporting information related to debt that arose from medical expenses;” 
• “Create a grant program within the U.S. Department of Health and Human Services to cancel medical debt, prioritizing low-resource providers and vulnerable populations,” and 
• Amend “the Public Health Service Act, updating billing and debt collection requirements to limit the potential for future debt to be incurred,” Sanders’ office said in its joint statement.

The data show that “earlier is better when it comes to medical debt relief,” Neale Mahoney, an economist and medical debt expert at Stanford University, said.

“This bill cuts off medical debt at the source by requiring hospitals to uphold their obligation to provide charity care to eligible patients who cannot afford to pay and supports hospitals so they can forgive debt before it gets sold to debt collectors,” Mahoney said.