Bernie Sanders Introduces Plan to Cancel $81 Billion in Medical Debt

And restore credit scores damaged by unpaid medical bills.

Senator Bernie Sanders campaigning at the University of North Carolina in Chapel Hill on Thursday. Preston Ehrler/SOPA Images via ZUMA

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Bernie Sanders not only wants to eliminate future medical debt with his plan for Medicare-for-All, he also wants to wipe the slate clean for Americans who already have debt from unpaid medical bills. On Saturday, the Democratic candidate announced an ambitious plan to eliminate $81 billion medical debt for Americans, reform bankruptcy laws, and even put an end to credit score agencies.

“The very concept of medical debt should not exist,” Sanders said in a statement. “In the wealthiest country in the history of the world, one illness or disease should not ruin a family’s financial life and future.”

Medical debt is a significant economic burden on millions of Americans —and though there is an academic debate over exactly how many bankruptcies are directly attributable to it, health care expenses are the largest single causes of bankruptcies nationwide. According to a 2014 report by the Consumer Financial Protection Bureau, half of all debt reported to credit agencies is medical debt, and one out of every five credit reports contains unpaid medical debt. It’s also a serious—though hard to measure—hazard to people’s health. A 2018 study from West Health and Gallup found that a quarter of all Americans had skipped a medical treatment due to cost.

Under Sanders’ plan, the government would negotiate and pay off $81 billion in unpaid medical bills that have been sold to collection agencies and are currently harming people’s credit reports. His plan would also limit the notorious tactics debt collectors engage in when they track people down and hound them to collect on the debts they have purchased. If implemented, the plan might also come well under its $81 billion price tag as debt sold to debt collectors is worth only a fraction of the original bill. 

In addition, Sanders’ plan would reform the 2005 bankruptcy law (the one Elizabeth Warren vigorously opposed and Joe Biden supported) so that it will be easier to forgive medical debt.

Finally, the proposal would stop medical debt from impacting people’s credit scores. Sanders would create a federal credit registry to rival and ultimately replace credit agencies like Equifax, and medical debt would not be factored into anyone’s score. “Credit scores also systematically perpetuate gaps in wealth and inequality between white and minority consumers,” the plan states. “We will establish a public registry that will end racial biases in credit scores and ensure those with medical debt are not penalized for the ‘crime’ of getting sick.”

On Twitter Saturday, Sanders’ campaign shared the experiences of some Americans weighed down by medical bills. 

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America will move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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