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Medical Debt in America

By: Reed Karaim

Pub. Date: July 29, 2022 Access Date: November 10, 2022

Source URL: https://library.cqpress.com/cqresearcher/cqresrre2022072900

https://library.cqpress.com/cqresearcher/cqresrre2022072900

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Table of Contents

Introduction

Overview

Background

Current Situation

Outlook

Pro/Con

Discussion Questions

Chronology

Short Features

Bibliography

The Next Step

Contacts

Footnotes

About the Author

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Introduction Medical debt is a problem for millions of Americans today. A reported 41 percent of U.S. adults are saddled with bills from hospitals and doctors' offices as well as those for prescription drugs and other health care needs. An estimated $140 billion in overdue medical debt is in collections. Analysts say America's medical debt problem is unparalleled in the developed world. President Biden, Congress and the major credit reporting agencies have taken steps to reduce the impact of medical debt on personal finances. But some activists say more needs to be done — including having the government cancel medical debt, which they say results from the nation's inadequate and overpriced health care system rather than personal failing. Critics say such a move would only encourage more medical debt, spur higher costs and tilt U.S. health care further toward serving only wealthy patients.

Medical billing envelopes are scattered on the floor of the closed Southeast Health Center in Ellington, Mo., in 2019, a snapshot of the disruption that has buffeted the U.S. health care system. Some 41 percent of U.S. adults are grappling with medical debt. Solutions range from cancellation to requiring more transparency on the costs of care. (Getty Images/The Washington Post/Michael S. Williamson)

Overview The Bhatt family in St. Louis found themselves saddled with an $858.92 bill for a visit to an emergency room last year after their 2-year-old son burned himself on the stove. They received the bill despite not having been seen by a doctor who was supposed to show up or receiving any care beyond a nurse checking their son's vital signs. While the Bhatts were trying to reach the hospital's “patient advocate” about the bill, it was sent to a collection agency.

Sherrie and Michael Foy built up a nest egg for Michael's retirement and had health insurance through his former job at Consolidated Edison, the New York utility. But the coverage was capped at $1 million, and when Sherrie needed to have her colon removed in 2016 and then developed a life-threatening infection, the Foys ended up on the hook for $800,000 in medical costs, which wiped out their savings and led them to declare bankruptcy after their provider sued them for unpaid bills. “They took everything we had,” said Sherrie Foy.

Medical debt can arrive in small or dauntingly large amounts, but more than 100 million Americans — 41 percent of U.S. adults — are now saddled with unpaid health care bills, according to a recent poll by KFF (formerly called the Kaiser Family Foundation), a nonprofit research organization. This growing crisis has drawn the attention of Congress, the Biden administration, the health care industry and consumer advocates. The problem, without parallel in other developed nations, has spurred a debate about the cost and structure of the U.S. health care system, along with the practices of providers and insurance companies, leading to widespread calls for reform.

In response, Congress passed the No Surprises Act, intended to protect consumers from unexpected medical bills. The law, which went into effect on Jan. 1, makes it illegal for health care providers to bill patients for more than what they would pay for in-network care under their insurance plan when unexpected, out-of-network medical expenses arrive. Health care plans must treat these expenses as if they were in-network when figuring out the patient's share of the bill. The law, however, does not include ground ambulance charges, an omission that could leave as many as 1.5 million people a year exposed to an unexpected bill.

This spring, the White House and the three big credit reporting agencies also announced steps to limit the impact of medical debt. The agencies will no longer include paid debt on credit reports or record debt under $500 and will wait a year before placing medical debt on a report. (Even if a medical debt has been paid, its continued listing on a credit report can affect a person's credit rating.) President Biden is directing federal agencies to review their lending practices to make sure medical debt does not weigh too heavily when determining loan eligibility and to investigate medical collection and billing practices. “No one in our nation should have to go bankrupt just to get the health care they need,” Vice President Kamala Harris said in announcing the White House actions.

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Vice President Kamala Harris and other Biden administration officials announced actions to help those struggling with medical debt on April 11. More than 100 million Americans are saddled with unpaid health care bills. (Getty Images/Anna Moneymaker)

But many health care analysts say more is needed, including fundamental changes in the way the United States delivers and pays for medical care. America has the most expensive health care in the developed world, according to studies, while trailing badly in most measures of the quality of care. (See Short Feature.)

The complex nature of the U.S. health care system, which involves independent physician practices, hospitals, private and public insurance, deductibles, copayments and a complicated pricing structure, contributes to the cost, say analysts, and plays a role in medical debt. Others point to a wave of mergers within the health care industry that have reduced competition.

For consumers, the price of U.S. health care is most apparent in the rising cost of insurance premiums and deductibles, both of which have grown faster than wages and inflation, along with the growth in required patient copayments for medical procedures. Premiums jumped 47 percent from 2011 to 2021, according to KFF, while deductibles rose slightly more than 68 percent during the same time, reaching $1,669 per person.

Progressives, led by Sen. Bernie Sanders, I-Vt., have called for forgiving medical debt and say the existence of so much debt strengthens the argument for universal health care. Conservatives say an answer can be found in greater price transparency and competition to help consumers make the best medical choices and bring down costs.

There is less dispute about the scope of the problem. Americans have $140 billion in medical debt that has been referred to collection agencies, according to a 2021 economic study in the Journal of the American Medical Association, which makes it the largest share of overall debt in collections. But the researchers were careful to note that this amount does not include medical debt on credit cards or that being paid through installment plans, making the overall total higher.

A little more than a third of Americans with medical debt owe less than $1,000, but more than one in 10 have $10,000 or more in debt, according to the poll by KFF.

KFF found that debt has weighed heavily on family budgets: 63 percent of those with medical debt in the last five years said it caused them to spend less on basics such as food and clothing, nearly half said they had used up all or most of their savings paying medical bills and 17 percent said they had declared bankruptcy or lost their home because of medical debt.

The debt reaches from lower-income to upper-middle-income Americans and into every state, but is more prevalent in certain regions. “There's medical debt everywhere,” says Wesley Yin, a UCLA economics professor and a co-author of the study on debt in collections. “But a lot of it is concentrated in the South and a couple of Mountain States. A lot of that lines up with where there are lower-income areas … but also with where Medicaid has not been expanded.”

The American Rescue Plan, the federal government's pandemic relief package, included expanded benefits for Medicaid, which provides health care coverage to lower-income Americans, and incentives for states to accept those benefits. The effort built on provisions in the Affordable Care Act (ACA), which increased Medicaid benefits and provided federal money to encourage states to sign on. Twelve Republican-dominated states have refused to adopt the expansion.

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Medical debt disproportionately impacts Black families, a symptom of the nation's racial wealth and health gap, says Berneta Haynes, a staff attorney at the National Consumer Law Center and author of a study on the disparity. Black Americans still earn significantly less, on average, than white Americans and are more likely to be uninsured or underinsured, all of which leaves many Black people more exposed to debt when they need care, she says. This creates an unhealthy circle where individuals with medical debt put off or skip needed care, leading to poorer health and greater health care costs down the road, she says.

The refusal of many Southern states to expand Medicaid, as the ACA allows, also has a disproportionate financial impact. Haynes says, “The fact that Black Americans are more clustered in these states has a lot to do with how medical debts hits us harder than other populations.”

The cost of medical care and the potential it brings for debt is a significant concern of Americans. Four in 10 fear the costs associated with a serious illness which is more than the number of those who say they fear the illness itself, according to a 2018 poll by West Health Institute, a nonprofit medical research organization, and NORC, a research group at the University of Chicago.

The poll also found that 40 percent of respondents had skipped a recommended medical test or treatment in the past year because of cost, while 32 percent said they could not fill a prescription or took less of a drug than recommended because of price.

The overall unhappiness with U.S. health care is clear: Three-fourths of those surveyed agreed with the statement, “Our country doesn't get good value for what we spend on healthcare.”

The United States is in the third year of the COVID-19 pandemic that has put unprecedented stress on the health care system, with more than 90 million cases and 1 million deaths reported as of mid-July. Hospitalizations are still averaging more than 40,000 per day.

In response, the government has poured resources into battling COVID-19 and supporting Americans financially. Health insurance companies also waived cost-sharing provisions to encourage the public to get needed treatment. Different studies have reached varying conclusions about the impact COVID-19 has had on medical debt. A study by the Urban Institute, a Washington-based think tank, found that the share of Americans struggling with such debt fell during the pandemic, at least temporarily stalling years of growth.

Researchers at the Urban Institute concluded the decrease in medical debt could be due to people staying away from doctor's offices and hospitals to avoid catching COVID-19, the extension of Medicaid benefits, increased subsidies for people getting insurance through the Affordable Care Act and government economic relief that sent checks directly to American households. “Some of the early studies show the cash assistance … that was provided to people blunted the financial barriers to accessing health care,” says Reginald Williams II, a researcher at the Commonwealth Institute, a foundation that promotes high quality health care.

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A medical team transfers a patient with COVID-19 from the emergency room at CentraCare St. Cloud Hospital in St. Cloud, Minn., on Nov. 23, 2021. The share of Americans struggling with medical debt has actually fallen during the pandemic, but federal health insurance subsidies enacted during COVID-19 are due to lapse in October. (Getty Images/The Washington Post/Jenn Ackerman)

Direct financial assistance ended last year, and many insurance companies have stopped waiving cost-sharing requirements. Moreover, the ACA's insurance subsidies are scheduled to lapse in October, which could lead to an explosion of health care costs for millions of Americans. Congress is considering an extension of the subsidies, but its fate is uncertain.

“It's a terrible decision to let these different pandemic measures around health care lapse. I'm very concerned about the growth in medical debt that we're likely to see,” says Lindsey Muniak, medical debt program director at the Debt Collective, a group that campaigns to abolish certain kinds of personal debt.

As Americans debate how to tackle the problem of medical debt, these are some of the questions being considered:

Are U.S. medical billing practices deceptive?

As medical costs have climbed and patient out-of-pocket expenses have grown, public outrage over medical bills has boiled over. The U.S. Consumer Financial Protection Bureau (CFPB) says it forwarded more than 750,000 consumer complaints about medical bills to companies for a response last year.

In half the cases, the recipients disputed charges, while about a third said their bills did not include enough information to determine if charges were warranted. The CFPB noted that the complaints have been growing, and many consumers feel coerced to pay questionable bills out of fear that unpaid charges will end up on their credit reports. “The consumer experiences in today's report strongly suggest that many medical bills reported on credit reports are disputed, inaccurate or not owed,” the CFPB stated.

Health care industry experts acknowledge that U.S. medical billing practices can be confusing, a result of the interplay between insurance and health care providers, which include doctors, hospitals, medical testing facilities and out-of-network specialists, all of which can show up in medical bills. “The complexity of our health care billing system cannot be underestimated,” says Haynes, of the National Consumer Law Center.

Some analysts say the complexity of U.S. medical billing appears to be at least partially intended to make it harder for consumers to determine if they are being accurately billed. “Is the system deceptive? The answer is yes,” says Mark Rukavina, program director at Community Catalyst, a nonprofit based in Boston that works to advance health care equity.

Rukavina places much of the onus on health insurance companies. Consumers, he explains, are often asked to agree to treatment without fully knowing what they are going to pay until their insurer has determined what it will cover. “Most people realize the details of their coverage after the fact,” Rukavina says, “after they've incurred medical bills.”

Once they receive their bills, it can be difficult to determine what charges are for or why they were denied by insurance, Rukavina says, and appealing denied charges can be a frustrating and time-consuming process, making it difficult for consumers to persevere. “The approvals and authorizations, making sure that's the right form, getting the right referral, getting the providers' numbers, it's a complicated system,” he says. “A lot of phone calls that lead to nowhere, a lot of queries that seem to get you nowhere. I think it's intentionally complicated.”

Hospitals and other providers also face criticism for their billing practices. Analysts note the use of billing codes and other medical shorthand that make it difficult to determine if services and treatments billed to the patient are accurately represented or were necessary.

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“Medical billing procedures and processes are very obscure to most people,” says Dr. Bill Honigman, health care human rights coordinator for the Progressive Democrats of America (PDA), who spent 37 years as an emergency room physician. Understanding medical bills can be daunting, he says, even for those in the medical profession.

The corporations that dominate much of U.S. medical care, including “big insurance, big pharma” and large hospital chains, have little interest in billing transparency, Honigman says, since it can limit their profitability.

But Sally Pipes, president and CEO of the Pacific Research Institute (PRI), a free-market think tank, places the blame for confusing medical billing on an overly regulated health care system, which adds layers of complexity to the operations of providers and health insurance firms. “A lot of this has to do with all the mandates and regulations on insurance companies,” she says. “They have to deal with all this stuff, which means that then we have to deal with all this stuff.”

Other analysts say the complexity of medical billing is more a result of how the United States approaches health care than any intent to deceive. “It's a fractured system,” says Katie Martin, CEO and president of the Health Care Cost Institute (HCCI), a nonprofit organization that analyzes insurance claims data. The number of players in that system mean that “it's unclear who should be responsible” for sending patients a unified, simple-to-understand bill, she says. Still, Martin adds, “I think we owe it to people to be more clear what their costs are to help them navigate what are often extraordinary life events…. There does seem to be industry momentum around [billing] transparency, but there is still more work to be done to make sure that it's useful to most consumers.”

The federal government issued a new transparency rule that took effect July 1 requiring insurers to post online the rates for covered medical procedures they have negotiated with different health care providers, which should give consumers a better idea of what they will end up paying. But analysts say the impact of the rule will depend on how accessible the data is and how aware the public is that it is available. Hospitals already have a similar price transparency rule, but as of Jan. 1, only 14 percent of hospitals were in compliance, and its impact has been negligible.

Still, Molly Smith, group vice president of public policy at the American Hospital Association (AHA), says her industry is working hard to reduce billing confusion. “A lot of our members have worked with patient advisory groups to work through how you can make [billing] clear,” she says.

Smith believes a big part of public discontent with medical billing springs from the growth of insurance policies with high deductibles, as well as coinsurance provisions that mean insured people pay a percentage of the costs for covered procedures even after the deductible has been met, all of which can induce sticker shock in unsuspecting patients.

Part of the effort by hospitals, she says, involves making sure potential out-of-pocket costs are explained clearly before treatment. “I think there's been a tremendous amount of growth in trying to have these conversations up front,” Smith says, “to make sure there's fewer surprises on the back end.”

Should the federal government forgive medical debt?

This spring, as the White House and credit reporting companies announced steps to limit the impact of medical debt, Sanders renewed a call he first made during his 2020 presidential campaign. “‘Medical debt” and ‘Medical bankruptcy’ are two phrases that should not exist in the United States of America…. We must cancel all medical debt,’ he posted on Twitter.

Sen. Bernie Sanders (I-Vt.) has called for the federal government to forgive medical debt, including in this Twitter post. Others say forgiving debt would encourage irresponsible behavior. (Bernie Sanders Tweet/Screenshot)

Sanders also reiterated a claim he made during his presidential run that 500,000 Americans will go bankrupt this year from medical bills, financial calamities that do not spring from personal irresponsibility. “They didn't go to Las Vegas and blow their money at a casino. Their crime was that they got sick,” Sanders said then. “How barbaric is a system that says, ‘I’m going to destroy your family's finances because you had cancer'?”

But Paul Ginsburg, a professor of health policy at the University of Southern California, believes forgiving debt would encourage irresponsible personal behavior, which would have a series of negative consequences as people would run up medical bills they could not afford if patients were no longer as worried about what care cost.

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“If the federal government did that on regular basis, we would have higher prices, we would have more medical debt, people would not get health insurance, they would just rely on the government's [canceling] of medical debt,” says Ginsburg. “It sounds, to me, like a really bad idea.”

Supporters of canceling medical debt generally favor coupling it with universal health care, either Medicare for all or some equivalent, which they say would address those adverse consequences. “We need to alleviate or remove medical debt that people have because we've been wrong to allow it to happen in the first place,” says Honigman, of the Progressive Democrats of America. “And as long as they have medical debt, it's further impacting their lives and we need to correct that as we move forward.”

But Benedic Ippolito, a senior fellow of health economics at the American Enterprise Institute, a right-leaning think tank in Washington, says medical debt forgiveness raises questions of equity for health care providers and even patients. For hospitals and medical professionals, “we're talking about services that have been rendered, but people have not been paid. I don't think that's fair to providers,” Ippolito says.

If debt were to be canceled without compensation for those who provided the care, he continues, the result could paradoxically hurt the people it is most intended to help. “There's no question in my mind that higher-end providers would be demanding full payment up front,” he says, “and then concerns about [equal] access become even more stark. If you're trying to help [economically vulnerable] people, it becomes a real problem if the policy impedes their access to health care.”

RIP Medical Debt, a charity founded by two former executives in the debt collection industry, provides a model for how to cancel at least some medical debt. The charity buys up debt considered hard to collect on debt-trading markets and even from hospitals for pennies on the dollar and then cancels it. (See Short Feature.)

In a study of the medical debt problem for the Greenlining Institute, a California nonprofit that focuses on racial and economic equity, researcher Brianna Wells noted that the U.S. government could take the same approach to cancel a substantial portion of medical debt without breaking the budget, while also “avoiding a financial windfall for debt collectors.”

Community Catalyst's Rukavina, however, says medical debt is hard to cleanly separate from a person's overall finances. About 40 percent of people exhaust their savings trying to pay it off, he says, and, if they come up short, some turn to family and friends, and then many “start doing things that make it worse” — transferring it to credit cards, taking out personal loans or even second mortgages. “It doesn't sit so cleanly in a bucket. It's woven throughout people's economic interactions,” he says, “so it's hard to think about how you forgive all that debt.”

A more effective first step, Rukavina says, would be making sure consumers are fully aware of options that already exist to protect the most vulnerable from medical debt. Under the ACA, nonprofit hospitals, which make up the majority of such facilities, are required to have a financial assistance plan in place to help lower-income patients. “Making sure that people are fully informed or screened for eligibility for [these] programs could really help with medical debt,” he says.

But Astra Taylor, co-founder of the Debt Collective, said canceling debt would not only directly help millions of people in economic duress — a total she expects to grow as pandemic relief ends — but would benefit the country as a whole. “Canceling medical debt would pull millions away from the brink of insolvency, increase spending in the broader economy, and reduce suffering and stress,” said Taylor.

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Is U.S. health care overpriced?

Repeated studies have shown the United States has the most expensive health care system in the world. Americans pay significantly more, both on a per-capita basis and as a share of the nation's gross domestic product (GDP), than the citizens of any other developed nation.

Health care economists say that does not necessarily mean U.S. health care is overpriced. Value is not simply tied to price. Quality of care, the sophistication of treatment and access — the ability to get care when and where you need it — are all part of the value equation.

Pipes, head of the PRI, says the price of U.S. health care reflects the quality and access to care Americans want. “We have the very best health care. It's not cheap, but America is a wealthy country, and Americans are impatient,” she says. “They want the best care, and they want to get it now, and that's expensive.”

Pipes adds that the United States leads the world in medical research, which can also be expensive, but rewards consumers with cutting-edge treatments in areas such as cancer care that have significantly benefited millions of patients.

Other analysts, however, say the data do not indicate Americans are getting better health care. The United States ranked last among 11 developed nations in a 2021 comparison of health care performance done by the Commonwealth Fund, a foundation that works to promote high quality health care. The study looked at access to care, the care process, administrative efficiency, equity and health care outcomes. The United States ranked last in every measure except care process, which focused on preventative care and communication between care providers and patients.

The United States did notably poorly in three key measures. It had the highest infant mortality rate, the lowest life expectancy after age 60 and, by far, the highest maternal mortality rate, which measures death while giving birth. The U.S. maternal mortality rate was more than twice as high as France, the developed country with the next highest rate.

“It's hard to rationalize the prices we see in the U.S. for the outcomes that we're getting,” says Martin, who heads the HCCI.

The American Medical Association (AMA), which represents physicians around the country, responded to a query about costs by referencing one of its reports. “There is limited value in highlighting cost comparisons between countries without also considering the socioeconomic and cultural context in which a health care system operates,” the report said.

U.S. health care, the report said, is uniquely affected by the country's relatively wealthy economy, which indicates an ability to pay for health care services, and “national liabilities such as high rates of homicide, suicide and domestic violence.” The report also stated that U.S. health care professionals are paid more than in other countries because the medical profession has to compete with other highly paid fields such as law and finance to attract talented individuals.

But Dr. Marty Makary, author of The Price We Pay: What Broke American Health Care — And How to Fix It, cited several examples of exorbitant medical pricing in the United States that seemed divorced from cost.

In one case, a French patient in the United States who needed heart bypass surgery was initially quoted a price of $150,000 by one hospital. When he announced his intention to go back to France, where the surgery would cost only $15,000, the hospital representative offered to cut the price to $50,000 and then $25,000.

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Makary, a professor at Johns Hopkins University and a practicing surgeon at the university's hospital, said researchers at the University of Iowa called 101 hospitals to ask what they would charge for a heart bypass operation — and the prices ranged from $44,000 to $448,000. Half the hospitals refused to give an estimate. “Hospital charges are notoriously inflated — and hard to pin to any actual costs,” Makary wrote.

U.S. health care costs have increased steadily for decades at a rate exceeding inflation, and Yin, the UCLA economist, says a prime driver is industry consolidation — hospital and care provider mergers that lessen competition. “The cost increases are driven in one part through technological improvements, but more and more, it's being driven through increasing market power, through consolidation,” he says. “It's alarming. Nearly all markets are now considered highly consolidated.”

The American Hospital Association has reported that research indicates hospital mergers enhance the quality of care and reduce costs by spreading best practices and taking advantage of economies of scale.

But other researchers have concluded the opposite: industry consolidation significantly raises prices. One study conducted by KFF found that prices jumped 17 percent at hospitals acquired by a chain. An earlier study published in The New England Journal of Medicine also determined the price increases that accompanied mergers were not tied to increases in the quality of care.

“The research is pretty clear — where there are consolidations, prices are higher,” says Martin, of the HCCI.

AEI's Ippolito says the United States is unique among developed nations in the relative lack of government cost control measures in its health care system. “We have a tradition of doing a lot to subsidize health care,” he says, “and then nothing to control costs on the other end.”

Background The Progressive Movement

Health care moved to the forefront of U.S. political debate during a tumultuous period at the start of the 20th century when the country was moving from its largely rural past to a more industrialized, urban future. The era gave birth to the Progressive Movement, which sought to address a host of economic and social ills tied to increasing industrialization, proposing reforms such as an eight-hour workday, an end to child labor and a minimum wage. It also included a new focus on the nation's health.

The movement's high point came in 1912 when former Republican President Theodore Roosevelt sought to return to the White House as the candidate of the Progressive Party. The party's platform included a call for a national health service, which would be empowered to protect the public from disease.

Former Republican President Theodore Roosevelt campaigns in 1912 in a bid to return to the White House, this time as leader of the Progressive Party. The party called for a national health service to protect the public from disease, motivated by concern about working conditions in factories and living conditions in big-city tenements. (Getty Images/Bettmann/Contributor)

Other groups were thinking bigger. In 1915, a labor group, the American Association for Labor Legislation, drafted a bill for universal health coverage. The group had an ally in the AMA. “No other social movement in modern economic development is so pregnant with benefit to the public,” wrote the editor of the Journal of the American Medical Association.

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Congress debated the bill, which was also considered by 17 state legislatures.

But when the United States entered World War I in 1917 against Germany, the measure, which had been modeled on Germany's national health care plan, fell out of favor.

The Progressives' push toward national health care was motivated less by the cost of care, as it would be later, than by concern about overall health in a nation where working conditions in factories and living conditions in big-city tenements were unhealthy, often dangerous and dirty and many people simply avoided care.

But the reform movement faced opposition from the beginning in business circles, and when a conservative faction seized control of the AMA, the medical establishment became a powerful leader in the battle against efforts to create government health care. As health care economist Peter Swenson wrote, “The AMA's reactionary turn of the 1920s left an indelible stamp on medical politics for the remainder of the century.”

The New Deal

Health care reform, which faded into the background during the “Roaring 20s,” a period of economic prosperity and conservative political ascendence, returned to the political stage during the Great Depression.

As President Franklin Roosevelt fashioned his New Deal, which would give birth to Social Security, Isaac Rubinow, a longtime campaigner for national health insurance, urged Roosevelt to include it in his Social Security bill. But in the face of opposition from the AMA, the president decided that including it risked defeat for the entire legislation.

Things would change shortly after World War II. President Harry Truman, Roosevelt's successor, was an enthusiastic supporter of universal health care. In 1945, he threw his support behind a program of compulsory insurance funded through a payroll tax, similar to the method of financing Social Security. Truman aimed to win support by targeting the benefit to the most vulnerable part of the U.S. population, stating, “The health of American children, like their education, should be recognized as a definite public responsibility.”

Roosevelt's earlier fears proved prescient. The effort failed in the face of opposition from the AMA and other conservative interests. Truman would try again following his surprise election victory in 1948 when, in defiance of the polls, he defeated Republican nominee Thomas Dewey. But the AMA spent nearly $5 million and again succeeded in defeating the Truman plan.

Yet even as efforts to create a system of guaranteed universal health care stalled on Capitol Hill, health insurance was spreading in the United States, one employer at a time.

Employer-Based Health Care

As the nation industrialized, a handful of companies began hiring doctors to see to the health of their employees or, in some cases, providing financial assistance for medical care. “Their motivation: You can't run a factory if your employees are out sick,” said Robert Goff, co-author of End Medical Debt: Curing America's $1 Trillion Unpayable Healthcare Debt.

In 1929, Baylor Hospital in Dallas began offering a prepaid insurance plan to public school teachers for 50 cents a month, providing up to 21 days of hospital care annually. The plan would evolve into Blue Cross, one of the first national insurance providers.

Health insurance expanded in the 1930s, as hospitals recognized that many patients were struggling to pay for care in the midst of the depression. But it was World War II that began a dramatic transformation in U.S. health care. With factories desperate for workers and government wage controls capping what they could pay, employers turned to health benefits as a way to entice workers.

The U.S. government also provided a significant boost for employer-based insurance when the IRS ruled in 1943 that the cost of providing health insurance was tax-deductible for the employer, with the benefit tax-free to the employee.

“The Great Depression sparked commercial health insurance, and World War II spawned employer-sponsored health insurance,” said Goff. In 1940, only 9 percent of the population was covered by private health insurance, but by 1953, the number had grown to 63 percent. It would reach 70 percent in the 1960s.

Even as private health insurance spread, however, a gap remained in coverage for the elderly, who often lost health benefits when they retired, and lower-income people, either out of work or marginally employed without benefits.

In 1965, President Lyndon Johnson, riding the momentum of his landslide election the previous year, changed that. Johnson steered the Medicare and Medicaid Act, technically an amendment to the Social Security Act, through Congress, providing government health care benefits to both elderly and lower-income Americans. In recognition of Truman's earlier fight on behalf of national health insurance, Johnson traveled to Independence, Mo., Truman's hometown, to sign the bill into law and hand the retired president the nation's first Medicare card.

Medicare, which provided health insurance to people over the age of 65, and Medicaid, which extended benefits to lower-income people, dramatically expanded the social safety net for millions of Americans. But the quest for a program that provided health care to everyone continued.

In the 1970s, the nation came tantalizingly close to achieving that goal through negotiations between two political leaders at opposite ends of the political spectrum — Republican President Richard Nixon and Sen. Ted Kennedy of Massachusetts, a leader of the Democratic Party's liberal wing.

Nixon, who saw two of his brothers die of disease when young and watched his family struggle with medical bills, was a supporter of national health care, but believed it had to incorporate private insurers. His plan would have required employers to have insurance for their employees, providing subsidies for those that could not afford the insurance.

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Kennedy favored a “single-payer” plan in which the government provided health insurance for all Americans, paying for the program through a payroll tax. But when he realized his plan could not pass Congress, Kennedy entered into talks with the White House and came close to agreeing to a deal — before backing away at the last moment. Kennedy later said the decision was one of the worst mistakes of his political life. He told a friend, “That was the best deal we were going to get.”

But even as attempts to expand health coverage failed, economic changes were making the price of care more of a burden. In 1960, health care costs were $26 billion, 5.2 percent of U.S. gross domestic product (GDP). But by 1990, those costs reached $725 billion and were consuming 12.4 percent of GDP.

The number of Americans exposed to rising health care costs was also growing — by 1991, more than 34 million were uninsured. The stage was set for another battle over government-backed universal health care.

Clinton and Obama

In the 1992 presidential election, Democrat Bill Clinton, the 46-year-old governor of Arkansas, defeated Republican President George H.W. Bush, with a promise to provide affordable health care for everyone at the center of his campaign.

The focus reflected a new sense of urgency, both among Democrats, who had long sought such a program, and an increasingly frustrated segment of the public. Clinton's campaign rallies regularly featured the stories of Americans, often insured, who had their personal finances destroyed and their lives turned upside down by unexpected medical bills that sometimes reached into the hundreds of thousands of dollars.

First lady Hillary Clinton, assigned by her husband President Bill Clinton to lead a health care reform task force, speaks on the draft legislation in 1994. Bill Clinton campaigned on fixing the health care system, but opponents spent millions to ultimately kill Clinton's proposal, calling it too complex and expensive. (Getty Images/Sygma/Jeffrey Markowitz)

After taking office, the new president assigned his wife, Hillary Clinton, a Yale-educated lawyer, the job of heading a task force to turn his health care promises into legislation. Ten months later, Hillary Clinton's task force produced a 1,342-page health care plan that provided for universal coverage through both employer-based insurance and “regional health alliances” that would purchase coverage for a state's residents. Government would provide coverage subsidies for many Americans and would be deeply involved in setting medical prices and insurance premiums.

The bill's complexity became a prime force in its undoing. The forces that defeated universal health care in the United States for half a century had been gearing up to defeat the plan even before it was announced. Once the details became public, insurance companies and conservative policy groups spent hundreds of millions of dollars, primarily on TV advertising, to defeat Clinton's plan, ridiculing its length and many confusing provisions. The most notable ads featured a fictional couple, Harry and Louise, sitting on their couch and reacting in disbelief to “health care plans designed by government bureaucrats.”

In the end, as support withered even within his own party, the Clinton plan never came to a vote in Congress. Sens. Kennedy and Orrin Hatch, R- Utah, did negotiate a smaller extension of government health care benefits to children in lower-income families who still made too much money to qualify for Medicaid, creating the Children's Health Insurance Program (CHIP).

Although Clinton's effort failed, Democrats would take lessons from the effort that would play a role in the largest expansion of government-backed health care since the passage of Medicaid and Medicare.

In 2011, Democratic President Barack Obama, backed by substantial majorities of his party in the House and Senate, shepherded the Affordable Care Act into law. Obama succeeded where others had failed, in part, because his administration gave Congress the lead role in creating the legislation — unlike Clinton's secretive task force — and worked to craft an approach more acceptable to health insurance companies and the American Medical Association. “The act was the first federal law for expanding health care coverage ever supported by the AMA,” noted Swenson.

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The ACA was also less sweeping than Clinton's proposal. In an ultimately unsuccessful bid to garner Republican support, it was modeled on a Massachusetts state health care plan that became law under Republican Gov. Mitt Romney. The ACA left employer-based private insurance largely intact but added government-run marketplaces where the uninsured could get insurance, with those below certain income levels receiving subsidized rates. It also expanded Medicaid to provide health care to millions of the least affluent Americans.

Still, the law faced severe hostility from the Republican Party from the beginning, and when the GOP gained control of the House in 2010, it voted to repeal the ACA more than 70 times in the next seven years. None of the repeal measures prevailed in the Senate. The ACA also faced repeated court challenges, but it survived those as well. As of early 2022, the law, also known as Obamacare, provided an estimated 35 million Americans with health care, with 21 million coming through the Medicaid expansion.

Opponents of the Affordable Care Act, which President Barack Obama proposed and Congress passed, protest in front of the Supreme Court in 2012 during oral arguments over the law's legality. The court upheld the law, and about 35 million Americans have health care because of the ACA, but it did little to lower costs. (Getty Images/CQ-Roll Call, Inc./Bill Clark)

The ACA, however, did little to constrain rising health care costs, and as insurance companies raised deductibles and copayments over time, many Americans still found themselves struggling with unaffordable bills. In 2019, Sanders, then beginning his second run for the Democratic presidential nomination, seized on Americans' increasing difficulty paying for health care by promising to cancel what was then estimated to be $81 billion in medical debt that had been referred to collection agencies.

The country's long struggle over how to deal with the cost of medical care gained a new focus on debt only months before the COVID-19 pandemic would nearly overwhelm health care providers.

COVID-19 Federal Response

Faced with the largest and most deadly pandemic in more than a century, the U.S. government stepped up to bolster the health care system, which was simultaneously flooded with those suffering from COVID-19 while experiencing a dramatic drop-off in other patients, who stayed away for fear of infection.

In response, Congress authorized several grant and loan programs providing billions in aid to the industry. At the same time, expanded Medicaid and ACA benefits, along with direct cash payments to American families, sought to take the edge off the financial hardship felt by many families, while also seeking to maintain health care benefits.

Despite those efforts, a March Gallup poll found Americans are finding it harder to pay for care and are increasingly avoiding doctor's visits and prescription drugs because of the cost. Their view of the value of care was also deteriorating, with more than half saying U.S. health care is not worth the cost.

Current Situation Executive Actions

The Biden administration is addressing the issue of medical debt through a series of executive orders to federal agencies intended to both limit its impact on personal finances and determine the origins and validity of America's mountain of medical debt.

Among the actions announced by the White House:

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The CFPB will investigate credit agencies and debt collectors that “violate patients' and families' rights, and hold violators accountable,” according to the White House. The CFPB will also target credit reporting by health care providers or collections firms that is intended to coerce payment. It is studying whether unpaid medical bills should be included in credit reports.

The CFPB is increasing its consumer education effort to help families “navigate the complex and often confusing medical billing landscape,” the White House said, including providing information to help eligible patients access financial assistance when facing medical bills.

The Department of Health and Human Services (HHS) is evaluating how health care providers' billing methods affect access to and affordability of care and accrual of medical debt. The HHS is requesting data from 2,000 providers on their collection practices, lawsuits against patients, financial assistance packages and use of outside debt collection companies.

The administration is directing all federal agencies to remove medical debt as one of the factors determining creditworthiness for loans. As part of that effort, the U.S. Department of Agriculture (USDA) will stop incorporating medical debt into its calculations of a borrower's capability to repay a home loan from its rural housing service. The Small Business Administration is also reviewing its lending programs to identify ways to reduce the negative impact of medical debt on small businesses' access to credit.

The Department of Veterans Affairs (VA) is taking steps to make it easier for lower-income veterans to get debt they have with the VA forgiven. The application process and eligibility requirements are both being streamlined, with the VA planning to set a simple income threshold to qualify for relief.

“The announcement regarding the VA medical debt is very important. The administrative maze of paperwork required of folks who visit these hospitals is incredible, so loosening that burden is significant,” says Haynes, at the National Consumer Law Center. The changes will be particularly significant “to nonwhite veterans,” she adds, ‘because they are more likely to use the VA for their medical needs.‘

Congressional Legislation

Health care policy experts say the most significant legislative action Congress can take in the next few months to protect people from an explosion in insurance and health care costs is to extend pandemic-relief subsidies to people who buy their insurance through the Affordable Care Act insurance exchanges.

The ACA provides assistance to reduce the cost of insurance premiums for households earning between 100 and 400 percent of the poverty level — $13,590 in annual income for an individual and $27,750 for a family of four. But in 2021, the American Rescue Plan Act, the pandemic relief package, expanded premium assistance, making it available to people with incomes between four and six times the poverty level. The move provided aid to an estimated 3.7 million more Americans.

President Biden, flanked by members of Congress, former President Barack Obama and Vice President Kamala Harris, signs an executive order on April 5 marking the 12th anniversary of the ACA. The Biden administration is working to address medical debt through a series of executive orders. (Getty Images/Los Angeles Times/Kent Nishimura)

Those subsidies are set to expire in October without an extension, and many of those newly insured through the ACA could see their premiums soar, some doubling in cost, according to calculations by KFF.

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President Biden's Build Back Better bill, a sweeping package of administration priorities, included an extension of expanded premium benefits, but two Democratic senators, Kyrsten Sinema of Arizona and Joe Manchin of West Virginia, objected to certain provisions, blocking its passage. Biden has vowed to return to the legislation, but congressional observers are skeptical it can be revived. Manchin, the key opponent of even a scaled- down version of the measure, has left the door open to supporting a stand-alone health care bill that would include an extension of expanded premium benefits for two years, but his position has shifted repeatedly during negotiations.

The expiration of the benefits has been described as a “ticking time bomb” by one opinion writer, and the surge in premium prices is likely to lead to many people dropping out of the ACA insurance exchanges and an increase in medical debt when they need treatment.

Congress has also failed to act on extending assistance directly tied to fighting the pandemic. The government had been paying for COVID-19 testing, treatment and vaccines, but the funds expired this spring. Many people will now have to pay for what was formerly free care.

Without the aid, “people are going to experience affordability issues for COVID treatment,” says Krutika Amin, associate director of the Peterson- KFF Health System Tracker.

Other bills to strengthen consumer protections against the effect of medical debt on credit reports and to protect consumers from the more extreme measures used to collect on medical debts are pending in the House and Senate.

In the House, the Medical Debt Relief Act of 2021, sponsored by Rep. Katie Porter, D-Calif., would write into law recent action by the leading credit agencies, removing paid-off or otherwise cleared medical debt from credit reports and requiring a one-year waiting period before new medical debt could be reported to credit agencies, essentially giving patients a year to settle the debt before it would affect their credit. Companion legislation was introduced in the Senate by Sen. Jeff Merkley, D-Ore.

Another bill in the Senate, the COVID-19 Medical Debt Collection Relief Act, would prevent health care providers from seizing bank accounts or garnishing wages to collect on medical debt during the federal health emergency connected to the COVID-19 pandemic or for at least 18 months after the passage of the bill.

Sponsored by Sen. Chris Van Hollen, D-Md., the bill would allow suspension of the collection of medical debt for the same period and require providers to notify patients who have collection plans that they can have them suspended.

Also included are special protections for patients whose medical debt increased because of COVID-19 treatment or testing, extending the period under federal and health insurance guidelines in which they can appeal medical bills and prohibiting the accrual or collection of interest or fees during that time.

In the Courts

The AMA and the hospital association are suing over the implementation of the No Surprises Act. The lawsuit is challenging a rule issued by HHS over how billing disputes between insurance companies and health care providers should be settled under the law.

The two associations say the suit will not affect the provisions of the act intended to protect consumers from surprise bills. “It has nothing to do with the patient protections,” says Smith, AHA vice president of public policy. “We were very supportive of the patient protections in the act.”

Smith says the associations, which have been joined in the suit by individual health care providers, believe the administration is incorrectly interpreting the intent of the law in the arbitration process it established to settle billing disputes between insurance companies and health care providers.

The No Surprises Act requires health care providers to treat most unexpected out-of-network services as if they were in-network when billing. If the provider and the insurer cannot agree on the bill, the rule sets up the standards by which an independent arbitrator shall decide which side prevails. But the associations feel the process favors the insurance companies in a way not intended by Congress.

AHIP, the association that represents health insurers, counters that the rule is consistent with the intent of the law and fairly compensates providers while helping to contain rising health care costs.

The Texas Medical Association prevailed in a separate lawsuit against the rule in a U.S. district court in Texas this June, but the government is appealing the decision. The AMA and AHA lawsuit is pending in the U.S. District Court for the District of Columbia.

Outlook No Surprises Act

No one following the issue of medical debt is predicting that the billions already on the books are disappearing soon. Despite calls from consumer advocates and some politicians for the government to cancel debt, Congress is considered highly unlikely to adopt any large-scale cancellation in the polarized, closely divided political environment on Capitol Hill.

The immediate question is whether the No Surprises Act, now being implemented, along with steps taken by the White House, will notably lessen the impact of the debt on personal credit and reduce the amount of new debt going forward.

KFF's Amin points out that, despite the new law, people are still going to be hit with unexpected medical bills. “One big hole in the No Surprises Act is related to ground ambulance billing,” she notes. “We found that over half of ground ambulance rides were out of network, so that still has potential for surprise billing. People are not protected.”

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The law's success will also depend on how aggressively the government enforces it and educates the public about their rights, she says. There is an online portal to file complaints about improper surprise billing, but Amin notes, “In one of our surveys, we found that people don't know about this protection.”

Haynes, of the National Consumer Law Center, sees Medicaid expansion as critical to reducing medical debt. Until the states that have so far refused to accept it expand coverage, she says, “We're going to see how medical debt really has its ripple effect in families — people taking out second mortgages, going farther into debt. I think we're going to see exacerbated housing problems and employment issues the longer we wait on this.”

Ippolito, the AEI scholar, believes further efforts to address medical debt are unlikely in the foreseeable future. “I think what the credit bureaus have done is about as far as I expect them to go,” he says. “And then you get into a question of what Congress would do. I don't see anything happening before the midterms [this fall], and then I think it's very unlikely that the Democrats are going to control both houses, so I don't think changes are likely.”

But despite the political hurdles, Muniak, the organizer for the Debt Collective, believes change will come in the next few years. “I feel optimistic, largely because I know how many people are committed to fighting this injustice that is medical debt,” Muniak says, adding that her optimism is “cautious” because of powerful health industry forces who oppose any large-scale relief. “But I do think that we're at a kind of tipping point, where the level of medical debt has just gotten so egregious that the situation can't be sustained,” she says.

Medical debt is inextricably tied to the price of medical care, which has been rising faster than wages for years. When analysts look down the road, how they see the solution to the problem of cost depends on whether they favor a market-based based system or universal, government-insured care.

“Opening up the market to competition and personal choice, giving people opportunities to get the kind of health care they need and suits their needs” will result in lower costs, says Pipes, of the Pacific Research Institute. “And if the cost comes down, the amount of medical debt will be lower.”

Honigman, of the Progressive Democrats of America, believes significant change is going to take more than five years, but a single-payer plan, such as Medicare for all, will be the eventual solution. “The question is: when does the popularity for Medicare for all catch up and even surpass the money that drives our political system?” he asks. “That's just a matter of time. It's going to happen. It's just a question of when and how many people have to suffer before then.”

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Pro/Con Should the federal government forgive medical debt?

Pro Lindsey Muniak Medical Debt Program Director, The Debt Collective. Written for CQ Researcher, July 2022

The United States is in the midst of a medical debt crisis, with recent estimates placing the total amount of medical debt in collections in the range of $88 billion to $140 billion. These staggering numbers only hint at the full scope of the issue, since patients also finance enormous sums of medical debt every year using credit cards and personal loans that many later struggle to repay. Medical debt is the single largest cause of bankruptcy in the country.

Like most household debts, the impact of medical debt deepens broader social and economic inequalities. The burdens are especially acute for lower-income and Black and brown households, where they intensify racial health and wealth disparities.

Last year, a Brookings Institution report found that the vast majority of health care debt (around 80 percent) belongs to households with zero or negative net worth. As a result, even relatively low-sum medical debts regularly trap individuals, families and communities in poverty, often interacting with other forms of debt to create cycles of financial hardship that are difficult to escape.

This crisis is a consequence of a financialized economy that forces Americans to take on debt to access goods and services (health care, education, housing, etc.) that are publicly financed in other industrialized countries. The scale of the problem speaks to a massive society-wide failure, one that demands a twofold intervention: the federal government should not only intervene to cancel past-due medical debt, it should also guarantee health care as a universal public good.

Because most medical debt is held by private creditors (hospitals, health care providers, debt collectors), the process of eliminating it would be complex. But it isn't unfeasible. The vast majority of creditors anticipate some degree of loss when collecting medical debt — that's the logic of the secondary debt market, where bundled debts are sold for pennies on the dollar and health care debt has a large presence. With sufficient political will, the federal government could organize a system for negotiating and settling past-due debts.

Although it's a critical first step, eliminating unpaid medical debt alone is not enough to address the roots of the debt crisis. We must also transform our country's health care system to ensure everyone can receive the care they need without fearing financial ruin. Minor tweaks and adjustments to the current cost-sharing framework won't do the trick. The clear long-term solution is a transition to a universal single- payer health care system that provides high-quality, equitable care for all.

Con Sally C. Pipes President, CEO and Thomas W. Smith Fellow in Health Care Policy, Pacific Research Institute. Written for CQ Researcher, July 2022

Progressives claim that medical debt leads to financial ruin for hundreds of thousands of Americans each year.

Sen. Bernie Sanders, I-Vt., recently argued that the high cost of health care is pushing so many people into bankruptcy that the government must cancel medical debt. It's the precursor to his call for a federal takeover of the entire health insurance system so that no one has to pay for medical care directly again.

Medical bills can be onerous. But they account for a minuscule portion of Americans' debt and are rarely the sole cause of bankruptcy.

Plenty of Americans hold medical debt — about 100 million, according to a recent poll from the Kaiser Family Foundation. Around one-third of them owe less than $1,000. Three-quarters owe less than $5,000. Add those figures up, and Americans' overall medical debt load could reach $195 billion, according to Kaiser.

It's a stretch to say debts like these are ruinous. According to that same Kaiser poll, 35 percent of people who have had medical debt say they would pay an unexpected $500 bill out of pocket. Another 41 percent say they would pay it off over time.

Medical debt is a fraction of the other obligations that Americans freely take on. It's less than one-fourth of the $841 billion in outstanding credit card debt as of the first quarter of this year. And it's equivalent to less than 2 percent of the $11 trillion in mortgage debt we collectively hold.

In other words, the average American has all sorts of debt that could compound and contribute to bankruptcy. If someone declares bankruptcy, was it the $1,000 medical bill or the roughly $6,000 in credit card debt the average cardholder has that pushed them over the edge? It's nearly impossible to say.

A 2018 study in The New England Journal of Medicine (NEJM) analyzed the share of people with medical bills who went bankrupt, rather than how many bankruptcy filings included medical debt. The researchers concluded that approximately 4 percent of bankruptcies were caused by hospital medical debt.

About 414,000 people filed for bankruptcy in 2021. If the NEJM's analysis is right, hospital medical debt accounted for about 16,000 bankruptcies.

That's tragic. But it's no reason for the government to spend billions of taxpayer dollars canceling debt for people who have the ability to pay it off — much less socializing health insurance, as progressives demand.

Discussion Questions Here are some issues to consider regarding U.S. medical debt:

Why is it so difficult for patients to determine if health care providers are billing them correctly?

How does the No Surprises Act aim to address billing practices?

What effect has the COVID-19 pandemic had on health care and the U.S. medical debt crisis?

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https://files.consumerfinance.gov/f/documents/cfpb_medical-debt-burden-in-the-united-states_report_2022-03.pdf

https://jamanetwork.com/journals/jama/article-abstract/2782187

https://www.brookings.edu/research/the-racial-implications-of-medical-debt-how-moving-toward-universal-health-care-and-other-reforms-can-address-them/

https://www.kff.org/health-costs/report/kff-health-care-debt-survey/

https://www.cnbc.com/2022/06/22/100-million-adults-have-health-care-debt-and-some-owe-10000-or-more.html#:~:text=Collectively%2C medical debt in the,2019%2C according to Kaiser research

https://www.lendingtree.com/credit-cards/credit-card-debt-statistics/

https://www.reuters.com/business/us-household-debt-nears-16-trln-mortgage-auto-loan-demand-wanes-ny-fed-2022-05-10/#:~:text=The Federal Reserve Bank of New York's quarterly household debt,share in roughly a decade

https://www.nejm.org/doi/full/10.1056/NEJMp1716604

https://www.uscourts.gov/news/2022/02/04/bankruptcy-filings-drop-24-percent

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What role has the American Medical Association played over the years in the universal health coverage debate in the United States?

Opponents of forgiving medical debt argue this would increase prices and worsen health care accessibility. Do you believe the government should forgive medical debt? Why or why not?

Why does the United States spend so much more on health care than other higher-income countries?

Why did the Affordable Care Act fail to contain U.S. health care costs?

Do you support a single-payer health care system such as Medicare for all? Why or why not?

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Chronology 1912–1929 A rapidly industrializing United States begins to debate national health care policy.

1912 Presidential candidate Theodore Roosevelt and his Progressive Party bring health care to U.S. political debate by supporting the idea of national health insurance, although the party does not propose how it should be implemented.

1915 A labor advocacy group proposes a law for compulsory health insurance that draws a positive response from the American Medical Association (AMA), which represents physicians nationwide. The measure is debated by Congress, but not adopted.

1920 A conservative faction takes control of the AMA, and the group becomes a powerful force against government health care.

1929 Baylor Hospital in Dallas introduces a prepaid insurance plan for schoolteachers, which evolves into Blue Cross, one of the first national health insurance providers.

1935–1959 The New Deal expands the social safety net; private health insurance becomes popular.

1935 President Franklin Roosevelt considers adding universal health care to the Social Security Act, which becomes law as part of his New Deal domestic program, but decides it could derail the entire package.

1941–1942 With factories desperate for workers and government wage controls putting a cap on what they could pay as the United States enters World War II, employers turn to health benefits as a way to entice workers.

1943 IRS rules that the cost of providing health insurance is tax-deductible for the employer, with the benefit tax-free to the employee, spurring the growth of private insurance.

1945 Democratic President Harry Truman calls for health insurance that protects all Americans. His proposal fails in Congress, but he renews the call in 1946 and 1947.

1948 The AMA launches a campaign against national health insurance, labeling it “socialized medicine,” which, along with the opposition of business interests, helps to defeat Truman's plan a second time.

1954 As part of tax reform, the Internal Revenue Act of 1954 codifies into federal law the exclusion of employers' contributions to employee health plans from taxation, encouraging the growth of private health insurance.

1959 More than two-thirds of Americans are insured through private medical insurance.

1965–1993 Government health insurance programs Medicare and Medicaid are created, but attempts to enact universal insurance fail.

1965 Medicaid and Medicare, the most sweeping expansion of government-supported health care to date, are shepherded through Congress and signed into law by Democratic President Lyndon Johnson. The programs provide coverage for older and lower-income Americans.

1974 Republican President Richard Nixon and Democratic Sen. Ted Kennedy quietly negotiate a universal health care package, but Kennedy finally steps away, a move he later regretted.

1993 Fulfilling a campaign promise, Democratic President Bill Clinton introduces a plan to provide universal care through state insurance exchanges — but opponents ridicule its complexity, and it fails to even come to a vote in Congress.

2010–2017 Rising medical costs bring a new urgency to health care reform, but Republican opposition to government-run care strengthens.

2010 Democratic President Barack Obama signs the Affordable Care Act (ACA), which greatly expands health care coverage while providing additional protections for those already insured.

2011 After regaining control of the U.S. House, Republicans vote for the first of more than 70 times to repeal the ACA. All attempts die in the Democratically controlled Senate.

2015 Martin Shkreli, a hedge fund manager, becomes notorious for buying the manufacturing rights to an anti-parasitic drug, Daraprim, and boosting the price by more than 5,400 percent, focusing attention and public ire on rising drug prices.

2017 Another Republican attempt, led by President Donald Trump, to repeal the ACA fails when Sen. John McCain, R-Ariz., casts a critical vote against the repeal. Trump's alternative plan also fails in Congress.

2020–Present Medical debt has become pervasive in the United States; the COVID-19 pandemic spurs an expansion of government health care support.

2020 The COVID-19 global pandemic hits, spurring record hospitalizations and emergency visits…. Sen. Bernie Sanders calls for the government to cancel medical debt during his campaign for the Democratic presidential nomination…. Congress passes the No Surprises Act to protect consumers from unexpected, out-of-insurance-network medical bills.

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2021 The American Rescue Plan Act, a pandemic relief package, expands Medicaid benefits and ACA insurance subsidies, leading to record ACA enrollment…. A study by health care economists concludes Americans have $140 billion in medical debt that has been referred to collections, much higher than previously estimated.

2022 The three major credit reporting agencies say they will take steps to limit the impact of medical debt on consumers' credit ratings (March)…. President Biden announces executive orders to forgive some Department of Veterans Affairs medical debt, make sure medical bills are not unfairly burdening the public and limit the role of medical debt in determining federal loan eligibility (April).

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Short Features

U.S. Is Global Outlier in Medical Spending

“There is no other developed country that's comparable.”

The United States is unique: it leads the world in health care costs and medical debt, while simultaneously ranking below other developed nations in measures of the quality of care.

Americans spend more, both as a share of the nation's gross domestic product (GDP) and on a per-person basis, than 10 other developed nations, according to research by the Commonwealth Fund, an organization working for quality health care.

Canada, the nearest U.S. neighbor in the group, spends roughly half as much per person on health care as the United States — $5,300 compared to nearly $12,000 in the United States, according to the Fund.

There are no nation-to-nation comparisons for medical debt, but most health care analysts agree the United States, by far, has the largest amount of such debt among developed nations.

“The U.S. is such an outlier on health care spending, on the impact of out-of-pocket spending on individuals, that there is no other developed country that's comparable,” says Reginald Williams II, vice president of international health policy at the Commonwealth Fund.

The reason, says Katie Martin, CEO and president of the Health Care Cost Institute, which analyzes health insurance data, is that other countries have adopted systems of national care that relieve individuals of most of the financial burden for treatment and provide more control over costs.

Some countries use a single-payer approach. In the United Kingdom, for example, all citizens receive largely free care through the National Health Service, which is funded through general taxation. The government also sets a national health care budget, which helps to control costs.

Other nations have hybrid systems. Germany incorporates private health insurance and “Sickness Funds,” nonprofit health insurance plans, with a requirement for mandatory enrollment in one or the other. Representatives of physicians, hospitals and insurers meet annually to set fee schedules for medical care, establishing budget and price controls. Health care is largely funded through taxes on wages.

Kian Sweeney, 8, wears a virtual reality headset to distract him as Tracey Martin, left, a play specialist, and phlebotomist Michaela Hammond draw his blood in March at Leeds Children's Hospital in England. In the United Kingdom, citizens get largely free care through the taxpayer-funded National Health Service. (Getty Images/PA Images/Danny Lawson)

When it comes to medical debt, the United States is more comparable to developing nations. India, for example, has dealt with soaring medical debt since the onset of the COVID-19 pandemic. The nation has “a patchwork quilt of incomplete public insurance and a poor public health system,” said Vivek Dehejia, a Canadian economist who has studied the Indian system. “The pandemic has shown just how creaky and unsustainable these two things are.”

While China has achieved near-universal care since 2011 through a combination of mandatory employee insurance and special programs for rural workers and the self-employed, large out-of-pocket expenses allowed under the system have meant that medical debt is a problem, particularly in rural areas of the country where incomes are lower.

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The United States has both a system of incomplete public health insurance and high out-of-pocket spending. Medicare and Medicaid provide government insurance to older and less affluent Americans, while the Affordable Care Act subsidizes insurance to others. But most U.S health care still comes through private insurance and is delivered by private health care providers.

“Most stakeholders in the U.S. health care system need to generate margins to stay in business,” says Martin, “so they have a focus on revenue that I don't believe exists elsewhere.”

Analysts say the United States also lacks the constraints on health care prices and spending other developed nations have put in place, which helps to explain the nation's comparatively high health care costs. Other developed nations largely use systems in which prices are negotiated between health care providers and either the government or panels of private and public insurers and set at the national or regional level to help keep costs down.

The United States was not always such an outlier in medical spending and results. “In 1980, we were pretty comparable, spending about 8 percent of our GDP on health care,” says Williams. “But since then, the United States has really separated itself from the pack.”

Health care analysts say a combination of factors were likely to blame, including expensive technical innovations and increased administrative costs. But the most significant difference comes from rising prices in the United States at hospitals and physicians' practices and for prescription drugs.

Yet some health care experts dispute the idea that Americans get less for what they pay. Sally Pipes, president and CEO of the Pacific Research Institute, a free market-oriented think tank, says longer wait times for care in countries with government-managed systems, along with the taxes citizens pay for those health care systems, are hidden costs that more than level the field. Despite its bottom-feeding status in world rankings, Williams says, the U.S. system does have strengths. “We have really good hospitals, really good surgeons, and we manage cancer care in a way that is much more active than other countries,” he says.

The results, he says, indicate the United States has the capability to do better in other areas of health care, if the country makes it a priority. “I see hope in how we have managed our cancer care. If we can do it there, why can't we do it everywhere in our health care system?”

— Reed Karaim

[1] Eric C. Schneider et al., “Mirror, Mirror 2021: Reflecting Poorly, Health Care in the U.S. Compared to Other High-Income Countries,” The Commonwealth Fund, Aug. 4, 2021, https://tinyurl.com/3fy725u4.

[2] Emma Wager, Jared Ortaliza and Cynthia Cox, “How does health spending in the U.S. compare to other countries?” Peterson-KFF, Jan. 21, 2022, https://tinyurl.com/mr4aumds.

[3] Ruth Thorlby, “International Health Care System Profiles: England,” The Commonwealth Fund, June 5, 2020, https://tinyurl.com/bde9u8wz.

[4] Miram Blümel and Reinhard Busse, “International Health Care System Profiles: Germany,” The Commonwealth Fund, June 5, 2020, https://tinyurl.com/yckmh3b4.

[5] Krutika Pathi and Yirmiyan Arthur, “Pandemic leaves Indians mired in massive medical debts,” AP News, July 26, 2021, https://tinyurl.com/36sjrns4.

[6] Adam Jourdan and Ben Hirschler, “China healthcare costs forcing patients into crippling debt,” Reuters, July 9, 2016, https://tinyurl.com/2p9y73th.

[7] Yanjiao Xin et al., “What contributes to medical debt? Evidence from patients in rural China,” BMC Health Services Research, July 28, 2020, https://tinyurl.com/yrzx4rfc.

[8] “How are costs contained, Health System Features?” The Commonwealth Fund, June 5, 2020, https://tinyurl.com/535j27mv; “How has U.S. spending on healthcare changed over time?” Peterson-KFF Health System Tracker, Feb. 25, 2022, https://tinyurl.com/yck3sc9m.

RIP Medical Debt Buries Unpaid Doctor's Bills

Nonprofit wipes out medical debt of low-income Americans.

In 2011, Jerry Ashton and Craig Antico were successful businesspeople working in the multibillion-dollar debt collection industry. But they were about to begin a journey that would lead to founding RIP Medical Debt, a charity based in New York that buys up debt, not to collect, but to forgive.

To date, RIP Medical Debt has been able to wipe out more than $6.7 billion in debt for more than 3.6 million U.S. families since it began in 2014. The charity has accomplished that relief by drawing on its knowledge of financial debt markets to buy up and relieve unpaid debt for as little as a penny on the dollar. Because overdue medical debt is hard to collect, $10 can buy $1,000 in debt.

“We started out buying debt through the secondary market, the debt-buyer's market. But a fair amount of hospitals do not sell their debt to … [that market], so we decided it was important to start buying debt from hospitals,” says Allison Sesso, president and CEO of RIP Medical Debt.

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The charity runs on donations from individuals, corporate partners and foundations, Sesso says. The largest single contribution to date was $50 million from philanthropist MacKenzie Scott, who helped start Amazon with her ex-husband Jeff Bezos. Announcing the award, Scott spoke about the inspirational story of “two former debt collections executives” enabling donors to erase large amounts of debt with relatively modest contributions.

The transformation of those executives into leaders of a movement to free lower-income Americans from unpaid medical bills began when Ashton's curiosity led him to visit a camp set up in a New York City park in 2011 by Occupy Wall Street, the grassroots movement to address economic inequality. An ensuing dialogue with the protestors left him with growing concern about the cost of U.S. health care and the burden the bills placed on many Americans.

When asked to help with a “debt jubilee” in which the Occupy movement hoped to raise $50,000 to relieve debt, Ashton enlisted the help of his friend, Antico, who had long been unhappy with some practices of the collection industry. Together, they realized they could do more than the relatively modest goal of the jubilee. Their charity started small but received a boost when its work was featured on “Last Week Tonight with John Oliver,” the HBO late-night show.

“RIP has managed to forgive an impressive amount of debt and to bring much-needed attention to the issue,” says Francis Wong, a postdoctoral fellow at the National Bureau of Economic Research who has studied the charity's work.

RIP Medical Debt buys up the debt of people earning less than four times the federal poverty level, which varies by household size but starts at $13,590 for an individual, or whose debt is 5 percent or more of their gross annual income.

Businesspeople Craig Antico, left, and Jerry Ashton founded RIP Medical Debt, a charity that buys up billions of dollars in past-due medical debt and then erases it. The group has wiped out $6.7 billion in debt for more than 3.6 million people. (AP Photo/Seth Wenig)

Families that have their debt relieved generally do not know it is happening until notified by RIP Medical Debt. “We send them letters out of the blue,” says Sesso. “We worked really hard on the language [of the letters] so people don't think it's a scam. We actually send two letters for that reason. I have to say, the responses are the best part of the job.”

The charity posts responses from happy recipients on its website. The testimonials serve as advertising for the charity's work, but Sesso says there is an additional purpose. “We really want to focus on destigmatizing the debt and get rid of the idea that people somehow failed in failing to pay this debt and really point the finger at the system.” she says. “And the best way to do that is to get people to tell their stories.”

RIP Medical Debt is continuing to expand its relief efforts, Sesso adds, and has partnered with local organizations, including churches, other charities, businesses and, in Georgia's Athens-Clarke County, the local Democratic Party for campaigns targeting debt relief in their areas. “One area that we're growing into: Local governments are increasingly interested in leveraging local dollars and doing local debt relief through us,” Sesso says.

Despite its growth, RIP Medical Debt's efforts pale in relation to the $140 billion of outstanding medical debt in collections estimated in a recent study. Over the last decade, Ashton and Antico believe the total is closer to $1 trillion. In their book End Medical Debt: Curing America's $1 Trillion Unpayable Healthcare Debt, which they co-authored with a colleague, Ashton wrote, “medical debt forgiveness treats the symptom, but does not cure the disease…. We need a structural change in the system.”

Ashton said his work in the area has made him a convert to the idea of universal health care as the best option to solving the problem of the country's burdensome health care costs and medical debt. “We Americans,” Ashton said, “need to take a moral stand that health is a human right.”

— Reed Karaim

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[9] “Our Story,” RIP Medical Debt, https://tinyurl.com/3c2f33xs.

[10] “RIP Medical Debt,” accessed June 21, 2022, https://tinyurl.com/2w9avnmb.

[11] “RIP Medical Debt Receives Transformative Gift from Philanthropist Mackenzie Scott,” RIP Medical Debt, Dec. 15, 2020, https://tinyurl.com/5zxjut38.

[12] Leah Samuel, “Inside the medical debt charity that John Oliver just made famous,” STAT, June 6, 2016, https://tinyurl.com/2p84k2wh.

[13] “Who qualifies for debt relief,” RIP Medical Debt, https://tinyurl.com/mr7c2j3n. “HSS Poverty Guidelines for 2022,” U.S. Department of Health and Human Services, Jan. 12, 2022, https://tinyurl.com/2buutbzy.

[14] “Personal Stories,” RIP Medical Debt, https://tinyurl.com/2w9avnmb.

[15] Sarah Kliff and Margot Sanger-Katz, “Americans' Medical Debts Are Bigger Than Was Known, Totaling $140 Billion,” The New York Times, July 20, 2021, https://tinyurl.com/2w8737ee. Jerry Ashton, Robert Goff and Craig Antico, End Medical Debt: Curing America's $1 Trillion Unpayable Healthcare Debt (2018), p. 164.

[16] Ibid., p. 174.

Bibliography Books

Ashton, Jerry, Robert Goff and Craig Antico, End Medical Debt: Curing America's $1 Trillion Unpayable Healthcare Debt, Hoku House, 2018. Industry insiders who founded RIP Medical Debt, a charity dedicated to helping people erase such debt, offer a range of policies to meet the problem.

Makary, Marty, The Price We Pay: What Broke American Health Care — And How to Fix It, Bloomsbury Publishing, 2019. A surgeon and professor of health policy at Johns Hopkins University, who traveled across the United States to see how health care is experienced, offers solutions to repair what he sees as a broken system.

Reinhardt, Uwe, Priced Out: The Economic and Ethical Costs of American Health Care, Princeton University Press, 2019. A Princeton University professor and nationally recognized expert on health care economics explains why U.S. medical costs are the highest in the developed world and argues that our health care system is morally indefensible.

Swenson, Peter, Disorder: A History of Reform, Reaction, and Money in American Medicine, Yale University Press, 2021. A political science professor at Yale University traces the history of the U.S. medical profession and its evolution away from support for progressive policies, such as national health care, toward a more conservative, market-oriented industry.

Articles

Kliff, Sarah, and Margot Sanger-Katz, “Americans' Medical Debts Are Bigger Than Was Known, Totaling $140 Billion,” The New York Times, July 20, 2021, https://tinyurl.com/2w8737ee. A study by health care economists finds that medical debt now makes up the largest share of debt in collections — and that the $140 billion in collections makes up only a portion of overall U.S. medical debt.

Luhby, Tami, “Harris says White House will seek to ease American's medical debt burden,” CNN, April 11, 2022, https://tinyurl.com/4ex2wawf. The White House announces a series of executive actions to reduce the impact of medical debt on credit reports, forgive some debt held by the Department of Veterans Affairs and investigate medical debt billing and collection practices.

O'Brien, Sarah, “Some medical debt will soon disappear from consumer credit reports. What to know,” CNBC, June 9, 2022, https://tinyurl.com/yuwjzctt. The three largest credit reporting firms have agreed to remove an estimated 70 percent of medical debt from credit reports, which should help the credit ratings of many consumers.

Parker, Claire, “U.S. healthcare system ranks last among 11 high-income countries, researchers say,” The Washington Post, Aug. 5, 2021, https://tinyurl.com/yr2k4f2k. The United States spends the highest share of its gross domestic product on health care of 11 developed nations, but still has the worst-performing health care system among those countries, according to a study by the Commonwealth Fund, a health care research institute.

Reports and Studies

“Medical Debt Burden in the United States,” Consumer Financial Protection Bureau, March 1, 2022, https://tinyurl.com/4drry2cb. Medical debt is by far the most common debt in collections on credit reports and can have a significant impact on credit ratings and personal finance, according to a review of the medical debt landscape by the federal agency charged with protecting consumers in the financial sector.

Badger, Doug, and Brian Blasé, “A Targeted Approach to Surprise Medical Billing,” The Galen Institute, December 2019, https://tinyurl.com/4xe525j7. Truth-in-advertising and good-faith price estimates, combined with limits on unanticipated emergency service bills, would be more effective in protecting consumers from surprise medical bills than more government regulation, according to research by a market- oriented health care institute.

Haynes, Berneta, “The Racial Health and Wealth Gap: Impact of Medical Debt on Black Families,” National Consumer Law Center, March 2022, https://tinyurl.com/ybprsz8j. A study of medical debt finds it is disproportionately concentrated among Black families and other

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http://worldcat.org/search?q=ti:The+Price+We+Pay:+What+Broke+American+Health+Care+And+How+to+Fix+It

http://worldcat.org/search?q=ti:Priced+Out:+The+Economic+and+Ethical+Costs+of+American+Health+Care

http://worldcat.org/search?q=ti:Disorder:+A+History+of+Reform,+Reaction,+and+Money+in+American+Medicine

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families of color and that federally mandated financial assistance policies by hospitals fall short in providing aid to those in need.

Wells, Brianna, “Solving the Medical Debt Crisis,” The Greenlining Institute, March 2021, https://tinyurl.com/ysdav3mw. A nonprofit dedicated to addressing racial and economic inequities examines U.S. medical debt and suggests ending the practice of turning over medical debt to collection agencies, forbidding the debt from appearing on credit reports and canceling debt outright.

The Next Step Debt Forgiveness Plans

“Bernie Sanders Calls for the Cancellation of All Medical Debt,” Office of Sen. Bernie Sanders, March 22, 2022, https://tinyurl.com/2p8m5d7w. Sen. Sanders, I-Vt., remains one of the loudest voices in politics calling for mass forgiveness of medical debt.

“The Biden Administration Announces New Actions to Lessen the Burden of Medical Debt and Increase Consumer Protection,” fact sheet, The White House, April 11, 2022, https://tinyurl.com/9m5zk9w8. The White House announced actions aimed at lessening the burden of medical debt on consumers, including helping some lower-income veterans get their debt forgiven.

Quig, A.D. , “Chicago's Cook County hopes to eliminate $1 billion in medical debt. Here's how,” Chicago Tribune, July 21, 2022, https://tinyurl.com/yak7brus. Cook County plans to pay the nonprofit group RIP Medical Debt $12 million over the next three years to buy medical debt accumulated at hospitals across the county.

Health Care Prices

Chowdhry Sharma, Rahul, “Hospital group introduces statewide health care pricing information database,” Virginia Mercury, July 14, 2022, https://tinyurl.com/3mvdd5wh. Virginia launched a tool aimed at centralizing hospital service prices from across the state.

Ibarra, Ana B., and Kristen Hwang, “Health care costs keep rising. A new California agency aims to fix that,” CalMatters, July 15, 2022, https://tinyurl.com/4e6mh86c. California has a new agency dedicated to limiting growth in health care costs.

Reed, Tina, “Consumers will soon get access to huge amounts of health care price data,” Axios, July 1, 2022, https://tinyurl.com/2nt8xxbk. Health insurers that do not release information on negotiated rates with in-network providers, as well as out-of- network allowed amounts, will face a penalty of $100 per person per day in violation.

Medical Billing Practices

“CFPB Estimates $88 Billion in Medical Bills on Credit Reports,” Consumer Financial Protection Bureau, March 1, 2022, https://tinyurl.com/2p8kt3et. The federal agency released a report on inaccurate medical billing data and laid out plans to ensure that consumer credit reporting systems are not used coercively against patients and their families to pay questionable medical bills.

Keshner, Andrew, “‘It could be the difference between an approval and denial’: Experian, Equifax and TransUnion remove fully paid medical debt from credit reports. Will this help your credit score?” MarketWatch, July 5, 2022, https://tinyurl.com/2s35xud4. Credit bureaus are dropping fully paid medical debt from credit reports.

Lagasse, Jeff, “One-fifth of adults have received a surprise medical bill, survey shows,” Healthcare Finance, July 8, 2022, https://tinyurl.com/bdza8uu2. Even after a federal ban on surprise medical billing took effect, one in five U.S. adults has received an unexpected medical bill this year.

Medical Debt and Charity

Jones, Hannah, “Georgia Watch Awarded Grant to Aid State's Medical Debt,” Saporta Report, March 12, 2021, https://tinyurl.com/zzxyv9ej. A nonprofit organization is awarded $190,000 to assist with medical debt in southwest Georgia.

Ozaki, Andrew, “Lincoln church's medical debt program pays off over a million dollars,” KETV, July 20, 2022, https://tinyurl.com/yckkc45x. A Nebraska church raised nearly $300,000 to help 200 families pay off medical debt.

Wilson, Lawrence, “Washington mandates more hospital charity care; ‘last straw for rural hospitals’ feared,” The Center Square, July 1, 2022, https://tinyurl.com/2p86jmme. Washington state mandated that hospitals must offer free or heavily discounted out-of-pocket costs for hospital care in the recent Charity Care Act, but small rural hospitals do not know if they can shoulder the burden.

Contacts American Enterprise Institute 1789 Massachusetts Ave., N.W., Washington, DC 20036 202-862-5800 aei.org A leading right-leaning think tank whose research includes pro-market solutions to U.S. health policy challenges.

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https://tinyurl.com/ysdav3mw

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https://tinyurl.com/2nt8xxbk

https://tinyurl.com/2p8kt3et

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http://aei.org

American Hospital Association 155 N. Wacker Drive, Chicago, IL 60606 312-422-3000 aha.org The industry organization represents nearly 5,000 hospitals, health care systems and other providers of medical care.

Community Catalyst One Federal St., Boston, MA 02110 617-338-6035 communitycatalyst.org A nonprofit national health advocacy organization dedicated to advancing health equity and justice.

Consumer Financial Protection Bureau 1700 G St., N.W., Washington, DC 20552 855-411-2372 consumerfinance.gov A federal agency that works to assure consumers are treated fairly by lenders, banks and other financial institutions.

KFF 185 Berry St., Suite 2000, San Francisco, CA 94107 650-854-9400 kff.org Provides nonpartisan data and analysis on national health issues and the U.S. role in global health policy.

National Consumer Law Center 7 Winthrop Square, Boston, MA 02110 617-542-8010 nclc.org A nonprofit that advocates for the rights of low-income people, specializing in consumer issues, including medical debt.

Pacific Research Institute P.O. Box 60485, Pasadena, CA 91116 415-989-0833 pacificresearch.org A free-market-oriented think tank that promotes personal responsibility and opportunity, with a focus on health care.

RIP Medical Debt 28-07 Jackson Ave., Fifth Floor, Long Island City, NY 11101 844-637-3328 ripmedicaldebt.org A charity that buys up and pays off medical debt on the credit markets and from some individual health care providers.

University of Southern California Leonard D. Schaeffer Center for Health Policy & Economics 635 Downey Way, Verna & Peter Dauterive Hall, Los Angeles, CA 90089 213-821-7940 healthpolicy.usc.edu An academic institution that brings together health policy experts from universities and research centers to study health care issues.

Footnotes [1] Noam N. Levey, “The Doctor Didn't Show Up, but the Hospital ER Still Charged $1,012,” Kaiser Health News, Jan. 24, 2022, https://tinyurl.com/muz4b6jf.

[2] Noam N. Levey, “A surgery shatters retirement plans and leads to bankruptcy,” Kaiser Health News, June 16, 2022, https://tinyurl.com/3x9nvrf7.

[3] Noam N. Levey, “100 Million People in America Are Saddled With Health Care Debt,” Kaiser Health News, June 16, 2022, https://tinyurl.com/yc89hb83.

[4] Loren Adler et al., “Understanding the No Surprises Act,” The Brookings Institution, Feb. 4, 2021, https://tinyurl.com/2p8wkkpk; Krutika Amin et al., “Ground ambulance rides and potential for surprise billing,” Peterson-KFF, June 24, 2021, https://tinyurl.com/3atwfm92.

[5] “The Biden Administration Announces New Actions to Lessen the Burden of Medical Debt and Increase Consumer Protection,” fact sheet, The White House, April 11, 2022, https://tinyurl.com/9m5zk9w8; Aimee Picchi, “Most medical debt will be dropped from consumers' credit reports,” CBS News, March 18, 2022, https://tinyurl.com/tw3zwu7w; “Remarks by Vice President Harris Announcing Actions to Reduce the Burden of Medical Debt on American Families,” The White House, April 11, 2022, https://tinyurl.com/ycswxyb5.

[6] Claire Parker, “U.S. health-care system ranks last among 11 high-income countries, researchers say,” The Washington Post, Aug. 5, 2021, https://tinyurl.com/bdd3ws5r; Emma Wager, Jared Ortaliza and Cynthia Cox, “How does health spending in the U.S. compare to other countries,” Peterson-KFF, Jan. 21, 2022, https://tinyurl.com/c3ybhjmr.

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http://aha.org

http://communitycatalyst.org

http://consumerfinance.gov

http://kff.org

http://nclc.org

http://pacificresearch.org

http://ripmedicaldebt.org

http://healthpolicy.usc.edu

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https://tinyurl.com/3x9nvrf7

https://tinyurl.com/yc89hb83

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https://tinyurl.com/tw3zwu7w

https://tinyurl.com/ycswxyb5

https://tinyurl.com/bdd3ws5r

https://tinyurl.com/c3ybhjmr

[7] Reed Abelson, “When Hospitals Merge to Save Money, Patients Often Pay More,” The New York Times, Nov. 14, 2018, https://tinyurl.com/2p8nxej9; Karyn Schwartz et al., “What We Know About Provider Consolidation,” KFF, Sept. 2, 2020, https://tinyurl.com/34wx23dc.

[8] Sarah O'Brien, “Average family premiums for employer-based health insurance have jumped 47% in the last decade, outpacing wage growth and inflation,” CNBC, Nov. 11, 2021, https://tinyurl.com/5a83fx33.

[9] Sarah Kliff and Margot Sanger-Katz, “Americans' Medical Debts Are Bigger Than Was Known, Totaling $140 Billion,” The New York Times, July 20, 2021, https://tinyurl.com/n4zarcz.

[10] Levey, “100 Million People in America Are Saddled With Healthcare Debt,” op. cit.

[11] “Medicaid Expansion,” healthinsurance.org, 2022, https://tinyurl.com/3ackmfrp; “Status of State Medicaid Expansion Decisions: Interactive Map,” KFF, updated July 21, 2022, https://tinyurl.com/43yb696v.

[12] “Usual Weekly Earnings of Wage and Salary Workers First Quarter 2022,” U.S. Bureau of Labor Statistics, April 15, 2022, https://tinyurl.com/2p8jbx8x; Berneta Haynes, “The Racial Health and Wealth Gap: Impact of Medical Debt on Black Families,” National Consumer Law Center, March 2022, https://tinyurl.com/4eyc97k2.

[13] “Americans' Views of Healthcare Costs, Coverage, and Policy,” West Health Institute and NORC University of Chicago, 2018, https://tinyurl.com/37eexsj3.

[14] “Coronavirus in the U.S.: Latest Map and Case Count,” The New York Times, updated July 23, 2022, https://tinyurl.com/yc7nmn74.

[15] Michael Karpman, Kassandra Martinchek and Breno Braga, “Medical Debt Fell during the Pandemic. How Can the Decline be Sustained?” Urban Institute, May 2022, https://tinyurl.com/svhe28tu.

[16] “Most private insurers are no longer waiving cost-sharing for COVID-19 treatment,” KFF, Aug. 19, 2021, https://tinyurl.com/y8yd3kk8; Karen Tumulty, “Democrats are facing a ticking time bomb on health-care costs,” The Washington Post, May 24, 2022, https://tinyurl.com/yeyp576d.

[17] “Complaint Bulletin: Medical billing and collection issues described in computer complaints,” Consumer Financial Protection Bureau, April 2022, https://tinyurl.com/3b8xpp6j; “CFPB Report Spotlights Medical Billing Challenges,” Consumer Financial Protection Bureau, April 20, 2022, https://tinyurl.com/2w5r83xr.

[18] Deb Gordon, “New Healthcare Price Transparency Rule Took Effect July 1, But It May Not Help Much Yet,” Forbes, July 3, 2022, https://tinyurl.com/yc3td5x6.

[19] Bernie Sanders, Twitter post, March 21, 2022, https://tinyurl.com/2kkjx8v8.

[20] Sharon Zhang, “Bernie Sanders Calls for the Cancellation of All Medical Debt,” Truthout, March 22, 2022, https://tinyurl.com/42xtjz3f.

[21] Brianna Wells, “Solving the Medical Debt Crisis,” The Greenlining Institute, March 2021, https://tinyurl.com/yckrsz4r.

[22] Astra Taylor, “The Case for Wide-Scale Debt Relief,” The Nation, Jan. 4, 2021, https://tinyurl.com/29ztczvm.

[23] Eric C. Schneider et al., “Mirror, Mirror 2021: Reflecting Poorly; Health Care in the U.S. Compared to Other High-Income Countries,” The Commonwealth Fund, Aug. 4, 2021, https://tinyurl.com/yrvkspvx.

[24] Barbara L. McAneny, “Report 4 of the Council on Medical Service, Subject: Comparability of the Cost Estimates of Health Care Systems,” American Medical Association, 2009, https://tinyurl.com/2p82fuyu.

[25] Marty Makary, The Price We Pay: What Broke American Health Care — and How to Fix It (2019), pp. 15-17.

[26] “New Research Confirms: Hospital Mergers Reduce Costs, Enhance Quality of Care for Patients,” American Hospital Association, Sept. 4, 2019, https://tinyurl.com/2nfu9e6m.

[27] Karyn Schwartz et al., “What We Know About Provider Consolidation,” KFF, Sept. 2, 2020, https://tinyurl.com/34wx23dc; Nancy Beaulieu et al., “Changes in Quality Care after Hospital Mergers and Acquisitions,” PubMed.gov, Jan. 2, 2020, https://tinyurl.com/3f752e6w.

[28] “Progressive Party Platform of 1912,” The American Presidency Project, https://tinyurl.com/36s5ekf2.

[29] Jill Lepore, These Truths: A History of the United States (2018), pp. 377–379.

[30] Peter A. Swenson, Disorder: A History of Reform, Reaction, and Money in American Medicine (2021), p. 567.

[31] Lepore, op. cit., p. 438.

[32] Ibid., p. 532.

[33] Ibid., p. 548.

[34] Jerry Ashton, Robert Goff and Craig Antico, End Medical Debt: Curing America's $1 Trillion Unpayable Healthcare Debt (2018), p. 104.

[35] “Blue Cross: Origins,” Blue Cross Blue Shield, https://tinyurl.com/4yy4cz77.

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[36] End Medical Debt, op. cit., pp. 103–105.

[37] “President Johnson signs Medicare into law,” History.com, July 28, 2021, https://tinyurl.com/2r2dmc59; “Medicare and Medicaid Act (1965),” National Archives, Feb. 8, 2022, https://tinyurl.com/2s3kn6jm.

[38] Farah Stockman, “Recalling the Nixon-Kennedy health plan” The Boston Globe, June 23, 2012, https://tinyurl.com/bdexdrex; “Health Security Act,” Healthcare — NOW, 2022, https://tinyurl.com/yc7bba2n.

[39] End Medical Debt, op. cit., p. 107; Katharine R. Levit, Gary L. Olin and Suzanne W. Letch, “Americans' health insurance coverage, 1980-91,” Health Care Finance Review, National Library of Medicine, Fall 1992, https://tinyurl.com/5cy2fsxe.

[40] End Medical Debt, op. cit., p. 107; Katharine Levit, Gary Olin and Suzanne Letsch, op. cit.

[41] “Health Care Reform Initiative,” Clinton Digital Library, https://tinyurl.com/4xu7xbjx; Robert Pear, “Clinton's Health Plan: The Overview; Congress Is Given Clinton Proposal for Healthcare,” The New York Times, Oct. 28, 1993, https://tinyurl.com/mcu579w9.

[42] Lepore, op. cit., p. 598.

[43] “The Children's Health Insurance Program,” Georgetown University Health Policy Institute, Feb. 6. 2017, https://tinyurl.com/4udf5ssp; Jerry Gray, “Through Senate Alchemy, Tobacco Is Turned Into Gold for Children's Health,” The New York Times, Aug. 11, 1997, https://tinyurl.com/3p3uus67.

[44] Jackie Calmes, “Clinton Health Defeat Sways Obama's Tactics,” The New York Times, Sept. 5, 2009, https://tinyurl.com/mr3v3n26.

[45] Swenson, op. cit., p. 680.

[46] “The Affordable Care Act: A Brief Summary — March 2011,” National Conference of State Legislatures, 2011, https://tinyurl.com/yw7frkaj; Jessica Taylor, “Mitt Romney Finally Takes Credit for Obamacare,” NPR, Oct. 23, 2015, https://tinyurl.com/ystetdke.

[47] Chris Riotta, “GOP Aims To Kill Obamacare Yet Again After Failing 70 Times,” Newsweek, July 29, 2017, https://tinyurl.com/3ssw7nk8; Adam Liptak, “Affordable Care Act Survives Latest Supreme Court Challenge,” The New York Times, June 18, 2021, https://tinyurl.com/26hmjcmt; and “New Report Shows Record 35 Million People Enrolled in Coverage Related to the Affordable Care Act, with Historic 21 Million Enrolled in Medicaid Expansion Coverage,” U.S. Department of Health and Human Services, April 29, 2022, https://tinyurl.com/2p8rs976.

[48] John Whitesides, “Bernie Sanders calls for wiping out $81 billion in medical debt,” Reuters, Sept. 21, 2019, https://tinyurl.com/mspzjm5b.

[49] Nancy Ochieng et al., “Funding for Health Care Providers During the Pandemic: An Update,” KFF, Jan. 27, 2022, https://tinyurl.com/2atbae85.

[50] Dan Witters, “Benchmarking Healthcare Affordability and Perceived Value,” Gallup Blog, March 31, 2022, https://tinyurl.com/2p8xatk8.

[51] Biden Administration fact sheet on new actions, op. cit.

[52] “HHS Poverty Guidelines for 2022,” U.S. Department of Health and Human Services, Jan. 12, 2022, https://tinyurl.com/2kbsdpsj.

[53] Tumulty, op. cit.

[54] Hans Nichols, “Scoop: Sinema throws cold water on Build Back Better Revival,” Axios, April 5, 2022, https://tinyurl.com/4mpf8t5f; Burgess Everett, “Manchin's offer to Dems: Take a health care deal or try again later,” Politico, July 14, 2022, https://tinyurl.com/35ksrjpw.

[55] Tumulty, op. cit.

[56] Jennifer Tolbert et al., “Implications of the Lapse in Federal COVID-19 Funding on Access to COVID-19 Testing, Treatment, and Vaccines,” KFF, March 28, 2022, https://tinyurl.com/57m3az6a.

[57] “Rep. Porter, Sen. Merkley reintroduce Medical Debt Relief Bill,” news release, Office of Rep. Katie Porter, Feb. 3, 2021, https://tinyurl.com/2ebraeb5.

[58] “Van Hollen Reintroduces Legislation to Prevent Seizure of Patients' Bank Accounts, Wages During Covid-19 Pandemic,” news release, Office of Sen. Chris Van Hollen, Feb. 22, 2021, https://tinyurl.com/29z4kve3.

[59] “AHA, AMA and others file lawsuit over No Surprises Act rule that jeopardizes access to care,” American Hospital Association, Dec. 9, 2021, https://tinyurl.com/4hue5d2m; Victoria Bailey, “AHIP, BCBSA Back HHS Interim Final Rule in Surprise Billing Lawsuit,” HealthPayerIntelligence, Jan. 24, 2022, https://tinyurl.com/2te5fu62.

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About the Author Reed Karaim, a freelance writer in Tucson, Ariz., has written for The Washington Post, U.S. News & World Report, Smithsonian, American Scholar and other publications. He is the winner of the Robin Goldstein Award for Outstanding Regional Reporting and other journalism honors. He is also the author of two novels, the most recent of which, The Winter in Anna, published by W.W. Norton & Co., is set at a small-town weekly newspaper. He is a graduate of North Dakota State University in Fargo. His most recent report for CQ Researcher was on the Democratic Party's future.

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Introduction
Overview

Are U.S. medical billing practices deceptive?
Should the federal government forgive medical debt?
Is U.S. health care overpriced?

Background

The Progressive Movement
The New Deal
Employer-Based Health Care
Clinton and Obama
COVID-19 Federal Response

Current Situation

Executive Actions
Congressional Legislation
In the Courts

Outlook

No Surprises Act

Pro/Con

Discussion Questions
Chronology
Short Features
Bibliography

Books
Articles
Reports and Studies

The Next Step

Debt Forgiveness Plans
Health Care Prices
Medical Billing Practices
Medical Debt and Charity

Contacts
Footnotes
About the Author