The other side of medical debt forgiveness: Loss of revenue to health care providers
An financial analyst recently gave Congress an introduction to why some players dislike the idea.
Many in Congress want to help people with medical debt cope with the debt.
The Congressional Research Service recently published a commentary briefing lawmakers and their aides on some of the arguments against bills that would wipe out some medical debt or keep medical debt out of consumers’ credit reports.
Related: How North Carolina made hospitals do something about medical debt
Advocates for giving patients relief warn that even people with employer-sponsored health coverage are skimping on routine care for fear of medical debt.
The Consumer Financial Protection Bureau has argued that the ability to pay off medical debt has little to do with consumers’ ability to pay their other bills. The American Bankers Association disagrees, writes Karl Schneider, a financial economics analyst at the Congressional Research Service, in the brief.
A group for debt collectors has argued that keeping medical debt out of consumers’ credit reports could cause $24 billion in nonpayment losses in the first year and would be especially hard on smaller providers and rural providers.
If patients became less likely to pay their medical bills, “health care providers would impose even higher copayments and deductibles to compensate for the resulting decreased revenue,” Schneider adds.
Schneider lists some of the pending bills that could affect medical debt. One, H.R. 9129, would establish a grant program that would help nonprofits buy medical debt from hospitals. Another bill, S. 2483, would limit when medical bill collectors could garnish workers’ wages.
What it means: Any big changes in medical debt laws and regulations could affect a large number of workers. About 18% of all U.S. workers with commercial insurance and 25% of younger workers currently have medical debt, according to Goodroot.