Medical debt is a significant issue in the United States, affecting millions of Americans. Recent data shows strong public support for forgiving medical debt, particularly for those facing substantial financial hardships. According to a recent poll by the Associated Press and the University of Chicago, a majority of Americans favor medical debt forgiveness under certain circumstances, such as when individuals are wrongfully billed or have debt that is large relative to their income. Because this issue has broad interest, it’s important to be aware of the facts when customers ask.

Political Focus on Medical Debt

Like student loan forgiveness, medical debt has emerged as an important political issue in the 2024 presidential election. As NBC News reports, Vice President Kamala Harris recently announced a proposal from the Consumer Financial Protection Bureau (CFPB) to ban medical debt from credit reports entirely, aiming to reduce the number of Americans with medical debt listed on their credit reports to zero (down from 46 million in 2020). This move is expected to improve the financial health and well-being of millions, potentially raising credit scores by an average of 20 points and increasing mortgage approvals by about 22,000 each year. Harris emphasized that medical debt "makes it more difficult to get by, much less get ahead," highlighting the need for such reforms to promote financial fairness.

Additionally, the Harris campaign has proposed a plan to completely forgive medical debt for millions of Americans. According to CNBC, this plan aims to relieve individuals of existing debt and prevent future debt accumulation, highlighting their position that no one should face financial ruin due to health problems.

However, not everyone supports the idea of medical debt forgiveness. Some, like Senator Bill Cassidy, a Louisiana Republican and ranking member of the Health, Education, Labor, and Pensions (HELP) Committee, argue that a one-time cancellation of medical debt is merely a "Band-Aid" solution that fails to address the underlying issues of high healthcare costs. In a June 11 Newsweek article, Cassidy emphasizes that while forgiving debt may provide temporary relief, it ultimately shifts the financial burden onto taxpayers and does not resolve the systemic problems contributing to the ongoing healthcare crisis.

Drivers of Medical Debt

The main drivers of medical debt, according to the American Hospital Association (AHA), are gaps in health insurance coverage and high-deductible health plans. The AHA notes in a 2023 fact sheet that while these plans offer lower monthly premiums, they often expose individuals to high out-of-pocket costs, leading to debt when unexpected medical expenses occur. Additionally, "skinny" health plans and health sharing ministries provide limited benefits and lack consumer protections, which can result in significant out-of-pocket expenses and further contribute to the medical debt crisis.

Strategies for Reducing Medical Debt

Addressing medical debt requires systemic healthcare changes. The AHA advocates for reforms such as restricting high-deductible health plans to those who can afford them, prohibiting inadequate short-term plans, lowering maximum out-of-pocket limits, and eliminating deductibles and coinsurance in favor of flat co-payments. As we recently reported, the maximum out-of-pocket allowed on ACA plans is dropping slightly in 2025 (by $250 for individuals and $500 for families), but it is still too high for many Americans.

Additionally, consumers who cannot afford large medical bills have some strategies to consider. NPR suggests several steps to help reduce, negotiate, or even eliminate medical bills:

  1. Charity Care Programs: Check if the hospital offers financial assistance or charity care, which can significantly reduce or eliminate bills for those within certain income ranges.
  2. Negotiating Bills: Contact the hospital to negotiate the bill if you cannot afford to pay the full amount, as they may be willing to lower the total owed.
  3. Payment Plans: If upfront payment isn't possible, ask the hospital about setting up a payment plan, which often has lower interest rates than credit cards.

A Developing Story

The increasing support for medical debt forgiveness reflects a growing recognition of the heavy financial burdens that medical expenses place on Americans. While this issue won't be resolved overnight, ongoing discussions are pushing for equitable solutions that address both healthcare accessibility and financial stability. As awareness builds, there is hope for meaningful reforms to provide relief to those struggling with medical debt.