WASHINGTON, May 8 – Sens. Bernie Sanders (I-Vt.) and Jeff Merkley (D-Ore.), with Reps. Ro Khanna (D-Calif.) and Rashida Tlaib (D-Mich.), today introduced legislation to eliminate all $220 billion in medical debt held by millions of Americans, wipe it from credit reports, and drastically limit the accrual of future medical debt. 

The medical debt crisis has exploded in recent years, decimating Americans’ bank accounts and deterring them from seeking health care. Among all working-age adults in the United States, an estimated 27 percent are currently carrying medical debt of more than $500, and 15 percent have medical debt loads of $2,000 or more.

“This is the United States of America, the richest country in the history of the world. People in our country should not be going bankrupt because they got cancer and could not afford to pay their medical bills,” Sanders said. “No one in America should face financial ruin because of the outrageous cost of an unexpected medical emergency or a hospital stay. The time has come to cancel all medical debt and guarantee health care to all as a human right, not a privilege.”

Said Merkley: “Patients should be able to get the care they need when facing illness or injury without fear of financial ruin. America’s medical debt crisis continues to harm millions, and Congress must do all it can to relieve patients of this tremendous burden. Our Medical Debt Cancellation Act sets up a grant program to cancel patient medical debt. This bill is a common-sense step forward that will help families in Oregon and across the nation.”

“Our current health care system is bankrupting Americans. I’ve heard heartbreaking stories from constituents who have skipped doctor’s appointments due to cost, who have lost loved ones because they couldn’t afford their medication, and who aren’t able to buy a house or get a job because of crippling medical debt,” said Khanna. “I’m so proud to join Senator Sanders to cancel medical debt, wipe it from credit reports and reform our system going forward. This bill would transform the lives of millions of Americans and I couldn’t ask for a better partner in the fight.”

Millions of Americans struggle to pay their medical bills every year or are paying off medical debt. In 2018 alone, 8 million people were pushed into poverty due to medical expenses. Nearly 75 percent of adults in the U.S. say they are worried about being able to afford unexpected medical bills and nearly one out of every four people say they have skipped medical treatment because of concerns about cost, including one in five adults with health insurance coverage.

Medical debt can ruin credit scores and make it challenging to get a loan, take out a mortgage, or buy a car. Today, nearly four in ten American adults report having health care debt, and one out of every 12 American adults report having significant debt. Women, Black Americans, people with disabilities, and those living in rural areas and the South are hit the hardest. As a result of the broken U.S. health care system, one in three Black Americans have past due medical bills, as well as nearly half of American women, and nearly half of adults living in the South.

The problem is only getting worse. Research from Yale and Stanford revealed a recent spike in hospitals, including non-profit and public hospitals, bringing medical debt lawsuits against patients over unpaid medical bills – disproportionately impacting Black and low-income patients and patients living in rural areas. 

In support of the lawmakers’ legislation, medical debt expert and economist at Stanford University Dr. Neale Mahoney, said: “Evidence shows that earlier is better when it comes to medical debt relief. 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.”

“Medical debt and aggressive collection practices cause our patients to delay necessary care and destroy the trust necessary for healing relationships,” Dr. Luke Messac, Harvard Medical School emergency physician and historian. “Most health care workers do not want to be part of a system that does such damage to our patients’ lives. This bill helps prevent this harm by cancelling debt, improving access to financial assistance, and preventing medical bills from ruining credit scores.”

If enacted, the Medical Debt Cancellation Act would:

• Amend the Fair Debt Collection Practices Act, making it illegal to collect medical debt incurred prior to the bill’s enactment and creating a private right of action for patients. 
• Amend the Fair Consumer Credit Reporting Act, effectively wiping 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. 
• Amend the Public Health Service Act, updating billing and debt collection requirements to limit the potential for future debt to be incurred.

Canceling medical debt is a common sense position overwhelmingly supported by the American public. That support is nonpartisan with 84 percent of Republicans in favor of canceling it. In fact, when polled on which types of debt Americans would like to see forgiven, two-thirds of Americans pointed to medical debt. 

The legislation is endorsed by the Center for Economic and Policy Research, Center for Health and Democracy, Center for Popular Democracy, Just Care USA, Public Citizen, and Social Security Works.

Read the bill text, here.
Read the bill section-by-section, here.