Harris just proposed that the government use public funds to relieve medical debt for millions of Americans. This could reduce economic inequalities created by extreme medical bills.
New Debt Relief Plan
Vice President and Presidential Candidate Kamala Harris has introduced a new plan to get rid of medical debt for millions of Americans. This proposition is part of a push to address the financial strain that many Americans face because of high healthcare costs.
Improving Financial Stability
This plan would include forgiving medical debt, removing it from credit reports, and limiting debt collection practices. Ideally, Harris hopes to relieve some of the burden of medical expenses.
How Debt Forgiveness Will Work
This plan would be made possible by encouraging state and local governments to use public funds in order to purchase and eliminate medical debt. Medical debt that has not been paid can be bought at a discount, offering significant relief.
Relief for Vulnerable Populations
This relief is primarily aimed at helping low-income individuals who have accrued medical debt. This move could be essential in their financial well-being.
Avoiding Bankruptcy
Harris’ economic plan for relieving people of their medical debt is also intended to “help them avoid accumulating such debt in the future, because no one should go bankrupt just because they had the misfortune of becoming sick or hurt.”
Impact on Credit Reports
Many Americans with medical debt have had to suffer from the consequences of a low credit score. This plan could help many to apply for loans and mortgages with an improved credit score.
Limiting Debt Collection
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Another benefit would be limiting the aggressive practices that some hospitals and third-party debt collectors use. Consumers would benefit from additional protections.
Public Support
Medical debt is a huge issue for many Americans, so this has been received with public support. In total, there’s around $220 billion in medical debt, according to a KFF analysis.
Important for Americans
A recent poll by the University of Chicago Harris School of Public Policy found that 51% of adults believe forgiving medical debt is very important for the federal government, while 39% believe student loan debt is the priority.
Past Student Loan Efforts
The Biden-Harris administration focused its efforts on addressing student loan debt for Americans. Now, Harris is differentiating herself by spreading her efforts to medical debt also.
Harris’ Personal Motivation
In the past, Harris has also shared that she has a personal connection to the issue. Her mother had cancer many years ago, and her family was faced with the financial strain of expensive medical treatment.
The American Rescue Plan
The American Rescue Plan has already been important for canceling some medical debt from people’s records. Now, Harris is building on this program to help clear as much debt as possible.
Successful Models
Several states have used these funds to cancel medical debt for residents in their state. Harris’ proposal uses the success of these models for future program structuring.
Potential Benefits
This debt relief could provide significant financial benefits for households struggling to pay off medical debt. Many families will be better off, and overall economic stability and poverty rates could improve.
Concerns About Effectiveness
Some research has indicated that medical debt relief is not as impactful as we believe. A National Bureau of Economic Research study indicated that this relief does not have an impact on mental health, financial anxiety, or access to credit.
The Next Step
However, much of this research is likely skewed because of the recent medical debt relief efforts which have helped many Americans. Now, the next step is to clear higher debt amounts.
Economic Inequality
This plan indicates Harris’ intentions to focus on addressing economic quality. In this case, medical debt is an issue that mainly affects low-income and minority communities.
Seeking Treatment
Many Americans with medical debt avoid going to the hospital or doctor because they believe they’ll be forced to pay past-due bills. Reducing debt will encourage people to seek the treatment they need without fear.
Potential Challenges
While the plan has been met with public support, many are still concerned about the use of public funds for debt relief. Others could challenge the plan as not being extensive enough for all of the medical debt.
Future of Healthcare
Harris’ proposal is a huge deal for Americans faced with significant medical debt. The future of the healthcare system will hopefully allow people access to medical services without a huge financial burden.
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