Could Kamala Harris's plan to erase Americans’ $220B of medical debt be the solution for America’s health care crisis? Experts aren’t so sure

Finding the money to pay off medical debt, including dental bills, is like pulling teeth for consumers. KFF research shows 6-in-10 medical debtors cut spending on food, clothing and essential household items, while 4-in-10 took on another job or worked extra hours.

Can Harris’s goal be realized? There’s a chance. Her proposal follows a June White House announcement that American Rescue Plan funds would eliminate roughly $7 billion in medical debt for nearly 3 million people by the end of 2026. It also stated a Consumer Financial Protection Bureau proposal to remove medical debt from the credit reports of more than 15 million people, intending to expand it to all affected Americans.

States such as Arizona, Connecticut, Illinois and Pennsylvania have also launched efforts to attack medical debt. But can all this bring the speeding freight train of runaway medical expenses to a screeching halt? Here, the prognosis isn’t so rosy.

The crisis close up

Ask any consumer whose monthly bills exceed their budget, and they’ll tell you that wiping out debt does little, if anything, to fix their ongoing predicament and rising costs. In fact, experts point to this very phenomenon in the medical debt issue.

The U.S. Census Bureau found that as of 2021, 15% of American households had medical debt; the estimated median was $2,000 per all households. While that’s dwarfed by student loan debt ($20,000), it’s also unsecured, meaning that consumers have no tangible asset to pit against it in the way a mortgage is leveraged against a house.

In September, Mercer released a survey indicating that employers expected health benefit costs to rise 5.8% per employee in 2025, even after accounting for planned cost-reduction measures. If the 1,800 participants collectively have it right, this would mark the third consecutive year of rising costs — at a level more than double the current inflation rate of 2.4%.

Then there’s the issue of private equity firms driving medical debt through the roof. A recent report from the Private Equity Stakeholder Project reveals that PEs have expanded the use of medical credit cards, interest-bearing payment plans and strategic partnerships with banks “to indebt patients who cannot afford to pay a full medical bill at one time.”

That only serves to swell the debt patients already have. They’re also investing heavily in medical debt collection technology to assume a more direct role as the collection pitbull.

Who, if anyone, can fix it?

While the prospect of reigning in private equity and insurance firms is dim, erasing debt and fine-tuning the finance system around medical expenses will help countless Americans. Here, the presidential candidates stand in sharp contrast.

On health care, Trump led the unsuccessful charge to repeal the Affordable Care Act and never articulated then or since what he’d replace it with. That contrasts sharply with President Biden’s track record on containing soaring health costs, especially for seniors on Medicare. He capped monthly insulin dose costs at $35 with 2022’s Inflation Reduction Act and announced a deal in August to sharply lower prices on prescription drugs. On the high end, arthritis and psoriasis drug Enbrel will drop in price from $7,106 to $2,355 per month, a savings of 67%.

With all this noted, voters will make their own diagnosis as they head to the polls on Election Day. Most, if not all, know there’s no cure-all. However, their choice could impact how medical debt is treated well into the future.