Daily on Healthcare: The ins and outs of the Sanders medical debt relief plan

By | September 23, 2019

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IF YOU MISSED IT OVER THE WEEKEND: Democratic presidential contender Bernie Sanders has now unveiled his long-awaited plan to forgive all medical debt — a total of about $ 81 billion — having teased the notion several times on social media and broadcast news for over a month. Get caught up on the proposal below.

Good morning and welcome to the Washington Examiner’s Daily on Healthcare! This newsletter is written by senior healthcare reporter Kimberly Leonard (@LeonardKL) and healthcare reporter Cassidy Morrison (@CassMorrison94). You can reach us with tips, calendar items, or suggestions at dailyonhealthcare@washingtonexaminer.com. If someone forwarded you this email and you’d like to receive it regularly, you can subscribe here.

Sanders’ plan — first of all, where did that $ 81 billion come from? In a 2018 Health Affairs study, researchers combed through 2016 credit records for over four million Americans, finding that one in six had an overdue medical bill. The sum of all of those medical bills comes to $ 81 billion. More than half of those bills amounted to about $ 600 each, and the largest share of medical debt holders were 27 years old, just one year older than the cut off age for remaining on a parent’s insurance plan.

How does Sanders plan to tackle the multi-billion-dollar problem? The plan promises that the government will erase the $ 81 billion weighing Americans down by allowing the government to negotiate directly with collectors. The campaign has not added further details about the logistics. The plan would also be meant to put an end to predatory debt collection practices, which often include harassment, and will prohibit debt collection after the statute of limitations.

The plan would do away with for-profit credit rating companies like Equifax to create a public credit rating agency. What’s more, medical debt would be excluded from credit ratings.

The multi-billion-dollar sum reported in Health Affairs may actually be higher than what the government will have to pay. The market value of the total medical debt may be as low as $ 500 million, according to Craig Antico, a founder of the charity RIP Medical Debt, which buys and forgives medical debt, who spoke to the New York Times Saturday.

“A staggering 79 million Americans struggle to pay their medical bills or are paying off medical debt, including more than half of those making less than $ 40,000 a year,” the Vermont senator said in Saturday’s statement. “Last year alone, 8 million people were pushed into poverty due to medical expenses.”

Sanders’ go-to stat is a little shaky: An early advocate for “Medicare for all” (he “wrote the damn bill”), Sanders has garnered critical attention for repeatedly claiming that 500,000 Americans declare bankruptcy each year due to medical debt. But bankruptcy experts say the number is overstated.

The figure comes from a March editorial in the American Journal of Public Health in which Dr. David Himmelstein, the lead author, sampled debtors’ bankruptcy filings each year from 2013 to 2016 and found that medical costs were linked to 500,000 bankruptcies annually.

But even Himmelstein’s research shows that Sanders’ claim inflates the role of medical debt in causing bankruptcies. The editorial does not say the bankruptcies were directly attributable to medical bills; rather, it says that medical expenses played some role in those people’s financial distress.

Himmelstein added that declaring bankruptcy due to medical costs is often a middle-class problem and most often affects people with decent health coverage with high copays and deductibles rather than those without any coverage at all.

Other researchers have found dramatically lower numbers: Economists Carlos Dobkin, Amy Finkelstein, Raymond Kluender, and Matthew J. Notowidigdo conducted their own study to measure the rate of medical bankruptcies per year. Rather than look at bankruptcy filings to find medical bills, they looked at hospital admissions to find instances of bankruptcy after admission.

The economists studied hospital admissions in California from 2003 to 2007 and tied half a million of those patients to detailed credit reports to track how many filed for bankruptcy from 2002 to 2011. They concluded that hospitalizations contribute to only 4% of bankruptcy filings, and the rates of bankruptcy filings level off about four years after admission.

Even without a bankruptcy filing, medical costs could cripple a family’s finances: Dobkin, Finkelstein, Kluender, and Notowidigdo’s study highlights the rate of bankruptcies, but doesn’t address the fact that medical debt can lead to financial and personal hardships that don’t always result in a bankruptcy, Notowidigdo told Cassidy.

“Our findings suggest that medical factors play a much smaller role in causing U.S. bankruptcies than has previously been claimed,” the authors said in the report. “Overemphasizing ‘medical bankruptcies’ may distract from an understanding of the true nature of economic hardship arising from high-cost health problems.”

Read more about the senator’s plan here.

US DRUG PRICES QUADRUPLE THOSE OF SIMILAR COUNTRIES: REPORT: Drug prices in the U.S. are nearly four times higher than the combined average prices in 11 other similar countries, according to a report released Monday by the House Ways and Means Committee. The report finds that people living in the U.S. pay as much as 67 times more for prescriptions. Committee staff looked at 2018 pricing data for 79 drugs sold in the U.S, the United Kingdom, Japan, Canada, Australia, Portugal, France, the Netherlands, Germany, Denmark, Sweden, and Switzerland.

The report comes as House members prepare to hold hearings on drug prices this week, just after House Speaker Nancy Pelosi released a plan that would allow the government to tie the prices of certain prescription drugs to rates that are similar to other countries.

JUST AHEAD: APPELLATE COURT HEARING ON TITLE X: On Monday, an 11-member en banc panel of the U.S. Court of Appeals for the 9th Circuit will hear oral arguments in challenges to the Trump administration’s Title X family planning program rule. Several clinics have left Title X because they’re no longer allowed to directly refer to abortions if they accept the grants. The judges will hear arguments in San Francisco from states, Planned Parenthood, and other medical providers.

The case could eventually wind up before the Supreme Court.

ABORTION FOES SEIZE ON KLOPFER CASE TO PUSH FOR MORE ABORTION LAWS: Abortion opponents are pushing for new legislation following the discovery of 2,246 fetal remains in the garage of a deceased abortion doctor who faced multiple complaints while he was alive and lost his medical license.

Anti-abortion advocates and the White House have compared the turn of events, involving the late Dr. Ulrich “George” Klopfer, to the case of Kermit Gosnell, the Philadelphia abortion doctor who kept dismembered fetal remains at his clinic and was convicted of killing three infants born after botched abortions, of involuntary manslaughter of a woman having an abortion, and of multiple other crimes.

Rep. Jackie Walorski, who represents South Bend, Indiana, is circulating a letter to fellow Republicans calling for the U.S. attorney general to conduct an investigation and is looking at crafting legislation.

One approach she is considering is modeled after a bill that Vice President Mike Pence signed into law in 2016 when he was governor of Indiana. That bill required abortion clinics to provide for the cremation or burial of fetal remains after an abortion. The Supreme Court upheld the law this year, though it hasn’t ruled on its merits, and it became enforceable in Indiana this month.

The Rundown

Kaiser Health News Want to reduce suicides? Follow the data — to medical offices, motels and even animal shelters

Atlanta Journal-Constitution Georgia’s anti-abortion law gets first day in court

The New York Times ‘Value’ of care was a big goal. How did it work out?

The Baltimore Sun University of Maryland wins $ 200 million grant to develop flu vaccine that will work for years at a time

The Boston Globe Smoking ban at VA sites has some veterans fuming

Calendar

MONDAY | Sept. 23

Sept. 22-26. AHIP National Conference on Medicare, Medicaid, and Dual Eligibles. Agenda.

TUESDAY | Sept. 24

Sept. 24-26. Atlantic Festival. Agenda.

7:45 a.m. The Mayflower Hotel. 1120 17th St. NW. Politico event on “America’s Oral Health: An Emerging Crisis.” Details.

9:15 a.m. 1789 Massachusetts Avenue NW. American Enterprise Institute event on “A new vision for health reform.” Details.

10 a.m. 2154 Rayburn. Committee on Oversight and Reform Subcommittee on Economic and Consumer Policy hearing on “Don’t Vape: Examining the Outbreak of Lung Disease and CDC’s Urgent Warning Not to Use E-Cigarettes.” Details.

WEDNESDAY | Sept. 25

10 a.m. 2123 Rayburn. House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations hearing on “Sounding the Alarm: The Public Health Threats of E-cigarettes.” Details.

10:30 a.m. 2322 Rayburn. House Energy and Commerce Committee’s Subcommittee on Health hearing on “Making Prescription Drugs More Affordable: Legislation to Negotiate a Better Deal for Americans.” Details.

2:30 p.m. Dirksen 562. Senate Special Committee on Aging hearing on “Promoting Healthy Aging: Living Your Best Life Long Into Your Golden Years.” Details.

THURSDAY | Sept. 26

2 p.m. 2175 Rayburn. House Committee on Energy and Labor’s Subcommittee on Health, Employment, Labor, and Pensions hearing on “Making Health Care More Affordable: Lowering Drug Prices and Increasing Transparency.” Details.

Healthcare