Medical debt presents a significant challenge in the United States, and Vice President Kamala Harris has proposed a solution: a medical debt jubilee. Recent developments in Ohio cities such as Toledo, Cleveland, Columbus, Cincinnati, and Akron have exemplified practical approaches to addressing this issue.
According to surveys from the Commonwealth Fund and the Kaiser Family Foundation, around 41% of working-age Americans are burdened by medical debt. The total debt exceeds $220 billion, affecting an estimated 79 to 100 million Americans. A significant portion of these individuals have health insurance, yet medical debt remains a leading cause of bankruptcy. Daniel Lempert from the nonprofit Undue Medical Debt remarked that many adults lack even $500 for emergencies, highlighting the precarious financial situation that minor health issues can trigger.
In August, Vice President Harris proposed a federal medical debt forgiveness plan, emphasizing that no one should face bankruptcy due to illness or injury. The proposal currently lacks detailed implementation strategies, but the experiences of Ohio provide a blueprint. Ohio ranks 44th among states in “health value,” indicating that its residents generally experience poorer health outcomes despite high healthcare spending.
In Ohio, nearly two million residents face medical debt, a situation exacerbated by the economic impact of the Covid-19 pandemic. Local political figures have expressed concerns about further impoverishment due to medical debt. For example, Toledo leveraged a portion of the American Rescue Plan Act funds to purchase and forgive medical debt portfolios from hospitals. This effort, spearheaded by Michele Grim, involved collaboration with Cook County and the nonprofit Undue Medical Debt, which purchases debt for pennies on the dollar from collection agencies, offering patients much-needed relief.
The cost of these debt portfolios varies depending on several factors, including the hospital system and the length of time the debt has been held in collections. Notably, the initiative does not select individuals for debt relief but targets communities by ZIP code, focusing on those most in need.
Local governments in Ohio were innovative in their use of federal funds not initially earmarked for medical debt forgiveness. Consequently, cities such as Columbus, Cincinnati, Akron, Toledo, and Cleveland have relieved residents of significant medical debt burdens, collectively abolishing over $600 million in debt across Ohio.
Medical debt disproportionately affects communities of color. In Cuyahoga County, majority non-white areas have twice the rate of medical debt compared to white communities. Cleveland authorized the forgiveness of $200 million in debt for nearly 300,000 patients in cooperation with Metro Health hospital system, illustrating a successful model for other cities to consider.
Challenges remain, such as increasing awareness about this crisis and reducing associated stigma. However, efforts to share personal stories and engage with municipalities have raised visibility for medical debt relief initiatives. The nonprofit Undue Medical Debt has forgiven over $14 billion in debt nationwide, providing relief for many Americans.
Harris has been promoting her economic plans but has been less vocal about medical debt forgiveness. This initiative aligns with previous efforts she led, advocating for the removal of medical debt from credit reports. Although little public awareness exists about Harris’s plans, initiatives in Ohio demonstrate potential pathways for broader impact.
Senator Sherrod Brown of Ohio is one of the key advocates in Congress for removing medical debt from credit reports. Medical debt forgiveness resonates with voters; recent surveys show strong bipartisan support for government intervention to alleviate medical debt burdens.
As the political landscape evolves, Harris and other Democratic leaders have an opportunity to highlight these medical debt relief efforts, potentially extending them on a national scale to relieve millions of Americans from financial distress due to medical expenses.
