Sanders’ Plan to Eliminate $81 Billion in Medical Debt
Health Care

Sanders’ Plan to Eliminate $81 Billion in Medical Debt


Sen. Bernie Sanders released a proposal Saturday to wipe out the roughly $81 billion in past-due medical debt currently appearing on Americans’ credit reports, while making significant changes to the rules governing debt collection, bankruptcy and credit reporting.

Sanders proposes to:

  • Empower the federal government to negotiate and pay off past-due medical bills, which Sanders said affect 79 million Americans.
  • Limit “abusive and harassing debt collection practices” through a variety of restrictions on debt collectors.  
  • Reform the bankruptcy system to make it easier to discharge medical debt.
  • Create a new public credit registry to replace the current for-profit credit reporting agencies.

Skimpy on the details: The mechanics of Sanders’ proposed debt elimination is summed up in just one broad sentence: “Under this plan, the federal government will negotiate and pay off past-due medical bills in collections that have been reported to credit agencies.” No cost estimates were provided.

But it could be cheaper than you think: While critics are sure to dismiss Sanders’ proposal as yet another big government giveaway, wiping out $81 billion in medical debt could cost far less than the headline number suggests, since most past-due medical debt never gets paid off and therefore has little value to investors. Craig Antico, who founded a charity that helps people get rid of their medical debts, told The New York Times that the market value of all the outstanding past-due medical debt in the U.S. could be as little as $500 million.

And the proposal is about a lot more than medical debt: Beyond the medical billing system, Sanders’ proposal takes aim at the private credit reporting agencies, which he criticizes for their treatment of indebted consumers. Sanders proposes to exclude medical debt from credit reports while replacing the current reporting system with a public registry – a huge challenge to a highly profitable, multi-billion-dollar industry.


For more details, see Sanders’ proposal and analyses at The New York Times and Vox.