Biden’s plans for US medical debt crisis fail
the Biden Administration last week posted a set of steps that will help reduce medical debt burdenin concert with the No Surprises Act, a recent bipartisan law that aims to reduce surprise billing – the infamous phenomenon of gigantic out-of-network bills appearing after a medical procedure.
As for fixing the problems of the American health care system, that is pathetically insufficient.
This is a worthwhile step that will surely help millions of Americans. But in terms of addressing the problems of America’s health care system, it is pathetically inadequate. We still need sweeping health care reform, and postponing the day of reckoning only compounds the problem.
As Jenifer Bosco of the National Consumer Law Center explained to NPR, there are three main parts of the package. The first is the no-surprises implementation of the law by the Consumer Financial Protection Bureau, which recently issued guidelines to remind medical providers and debt collectors of what is no longer allowed, and the Department of Health and of Social Services. Second, there is debt forgiveness for veterans from the Department of Veterans Affairs, which is still in development. Part Three includes changes to the credit models used by the Federal Housing Finance Agency to reduce the impact of medical debt on the ability to obtain a government-insured mortgage.
Some of these things are really good. As David Dayen detailed in a recent article in The American Prospect, CFPB leader Rohit Chopra has a well-deserved reputation for using government power aggressively to protect citizens. Chopra himself recently pointed out that a significant proportion of medical debt is likely illegal: “Our credit reporting system is too often used as a tool to coerce and extort patients into paying medical bills they don’t maybe not even have to,” he said. in a report presentation of a new CFPB report on medical debt.
Illegal medical debt collection has been a problem for years. A lot of medical providers behave like de facto extortion rackets, trying to stick sick and vulnerable people (like the uninsured) with huge bills, and they’re often not too scrupulous with the legal formalities in the process. (Others defraud Medicare and Medicaidwhich is less terrible for individuals but still increases overall costs.)
Veteran forgiveness is probably less important, given that there are relatively few veterans and they are less likely to have this type of debt in the first place thanks to generally good VA care.
We spend around 16.8% of GDP on healthcare, which is 5.1 percentage points more than the second most expensive country, Germany.
But the broader context of health care is still extremely bleak. For starters, several important reforms that were part of President Joe Biden’s “Build Back Better” agenda are either dead or about to expire now that Sen. Joe Manchin, DW.Va., has blocked the package. As political analyst Jon Walker explained in The American Prospectthe US bailout fixed one of Obamacare’s biggest holes by expanding the generosity of grants so that no one on scholarships would pay more than a modest fraction of their earnings, theoretically making affordable coverage accessible to all.
But thanks to Manchin, that hole has been reopened, surprising Democrats in October, when millions of Obamacare exchange enrollees are expected to be told about gigantic premium increases. For a 60-year-old woman earning $56,000 a year in West Virginia, for example, premiums will skyrocket from $93 to $1,500 a month, according to Walker.
Even the No Surprises Act has some holes – notably that it does not cover ambulance rides, one of the main sources of balance bills. Congress can’t even come together to keep funding free coronavirus vaccinations and testing as the pandemic continues to simmer. Indeed, uninsured persons now receive slapped with huge bills to test.
More broadly, America continues to have the most expensive health care on Earth. According to 2019 figures (the best data we have on how health systems work outside of a pandemic), we spend about 16.8% of GDP to health care – 5.1 percentage points more than the second most expensive country, Germany. If Americans spent what Germans do on health care, we would save something like $1.1 trillion annually. If we think of bonuses as taxes – which they probably are, since they are de facto mandatory – then American workers are the second most taxed in the world.
Our health care is so expensive that funding our taxes alone for Medicare, Medicaid, Children’s Medicare, VA, and other government programs would be enough to fund universal health insurance in a peer country. Indeed, if we transplanted the Medicare for All system from Canada to the United States, taxes would actually go down.
And despite all that spending, we have mediocre to terrible health outcomes to show for it. Our cancer and stroke survival rate is decent, but we have the worst life expectancy among rich countries, about five to six years behind leaders like Japan and Norway. Our Child mortality rate is five times that of Iceland, and our maternal mortality rate is almost 11 times that of Denmark.
America is not a country that needs a little tinkering with its billing practices, welcome as reforms in the abstract are. The fact that even Biden’s humble footsteps couldn’t survive on members of his own party doesn’t speak well of the ability of the American political system to deal with the fact that health care is eating away at the American economy from the start. inside.