The Biden administration took new steps yesterday to reduce the burden of medical debt, but the move has not addressed its root cause and may have unintended consequences.
Important reason: The huge medical debt of the United States directly reflects the fact that many Americans cannot afford deductions and other out-of-pocket costs, but they cannot give up the care they need.
News promotion: Actions announced yesterday include an assessment of provider billing practices by the Department of Health and Human Services. Take into account the amount of federal grants they get. The government has also instructed all institutions to eliminate medical debt as a factor in participating in credit programs.
- Unlike credit card debt and car loans, medical care is often not an option, so the government argues that medical debt is a bad predictor of whether someone will pay other invoices.
- “In our country, we don’t have to go bankrupt just to get the medical care we need,” Kamala Harris said yesterday.
- “If you have medical debt because of illness or injury, your credit score won’t go down or it will be difficult to get the support you need to get out of debt,” she added.
- Government action follows last month’s announcement by a private credit bureau that credit reports will soon include most medical debt.
Line spacing: Health insurance reduces the chances of someone receiving an invoice that they cannot pay. That is, increasing the number of people with health insurance and preventing healthcare providers from sending surprise medical expenses to patients is a policy measure advertised by the Biden authorities yesterday that is a medical debt. It means reducing the threat.
- However, more and more insured Americans cannot afford the rising deductions, out-of-pocket, or other out-of-pocket costs along with the cost of underlying care.
- According to a recent KFF analysis, more than 40% of households do not have enough liquid assets to pay for the cost share of a typical private plan.
Reality check: Removing some of your medical debt does not prevent it from happening in the first place and can have unintended consequences.
- “Policymakers need to be aware of the potential unintended consequences that can undermine some of their goals. Lenders find a way to represent hidden medical debt or consume it. May try to avoid the possibility that one has them, “said Ben Ipporito of the American Enterprise Institute.
- “These policies can also reduce payment rates and affect the willingness of providers to treat certain patients,” he added.
What they are saying: Stacy Hughes, Executive Vice President of the American Hospital Association, said: “We look forward to learning more from the government about this new initiative.”
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