The Urgent Need for Medical Debt Relief

As an emergency medicine resident in the early 2000s, I had the unfortunate experience of encountering a patient with a heartbreaking story. A woman in her early 60s came to the emergency department complaining of back pain. In the past, it was common for uninsured individuals to seek care in the ER, even for low-acuity issues. I assumed her case would be no different, that her pain would be musculoskeletal in nature. However, as I examined her, I made a shocking discovery. Her left breast was completely hardened by an advanced stage of cancer. The tragedy of her situation became clear – she had avoided seeking care due to her lack of insurance and overwhelming medical debt. Despite my efforts to stabilize her, it was too late, and she passed away shortly after admission.

This story is regrettably not unique but rather emblematic of a widespread problem in the United States. Medical debt burdens countless Americans, with people of color and adults with disabilities disproportionately affected. As of 2019, the total medical debt in the country reached an astonishing $195 billion. Astonishingly, medical debt is the leading cause of bankruptcy in our nation. To cope with the financial burden, thousands turn to crowdfunding platforms like GoFundMe, desperately seeking funds to pay for their healthcare. However, only a mere 12% succeed in raising the necessary amount, leaving the majority without sufficient means to cover their medical expenses. This reality is unacceptable, and it is crucial that we prioritize addressing this issue as a matter of public health.

The passage of the Affordable Care Act (ACA) expanded insurance access for many Americans, but it did not solve the problem of medical debt. In fact, the number of health insurance plans with high deductibles and co-payments has continued to rise. These financial barriers place a significant strain on individuals and families when they require medical treatment. While hospitals are obligated to treat patients who enter their emergency departments, regardless of their ability to pay, this results in billions of dollars of uncompensated medical treatment each year. Approximately 25% of Americans struggle to pay their medical bills, and this burden often leads to rising prices for those with commercial insurance. Consequently, medical debt affects all of us, pushing some individuals to the brink of refusing further treatment due to financial concerns.

As physicians, we bear the responsibility of providing care to patients, while legislators have a duty to represent and protect their constituents. Reforming the American healthcare system should begin with addressing the issue of medical debt in a fiscally responsible manner. To that end, I have introduced the Medical Debt Relief Act as a Pennsylvania state representative.

The proposed legislation aims to establish the Medical Debt Relief Program within the Pennsylvania Department of Health. This program would allocate state funds to contract with a medical debt relief coordinator. Collaborating with hospitals and other healthcare providers, these coordinators would identify unpaid medical debt for individuals who earn less than 400% of the federal poverty level or pay over 5% of their annual income towards medical debt. Once identified, the coordinators would purchase the debt at a greatly discounted rate, similar to how debt collectors operate. However, in a compassionate departure from debt collection practices, the medical debt would be forgiven rather than pushed into collections. By classifying the medical debt relief coordinator as a charity, this approach would ensure that patients are not burdened with additional tax obligations resulting from debt forgiveness.

The Medical Debt Relief Act would have a substantial impact on the lives of hundreds of thousands of Pennsylvanians, particularly benefiting residents in rural areas, women, and people of color who bear the disproportionate burden of medical debt. Beyond providing relief to patients, this legislation would also alleviate the financial strain on clinicians and benefit the broader public. Similar efforts to relieve medical debt have yielded positive results at the county and municipal levels, with states like New Jersey and Connecticut even budgeting for medical debt relief programs.

A Comprehensive Approach

In addition to the debt relief program, my bill includes provisions that aim to improve transparency and accountability within hospitals. It would require hospitals to publicize their charity care programs, assist eligible patients in applying for these programs, and suspend billing until a patient’s eligibility for charity care is determined. This ensures that non-profit health systems fulfill their charity care obligations and addresses one of the root causes of escalating medical debt.

The Medical Debt Relief Act has already passed the Pennsylvania House of Representatives with bipartisan support and is currently being considered for inclusion in the state budget. As an emergency physician who has witnessed firsthand the deficiencies of our healthcare system, I urge other cities and states to adopt similar legislation to tackle this crisis responsibly. Medical debt is not a feature that should define our healthcare system. Let the Pennsylvania Medical Debt Relief Act serve as a model for change, allowing us to provide direct relief to patients and prevent the perpetuation of this tragic American reality. The time for action is now.

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