Democratic presidential candidate Sen. Bernie Sanders has released a plan to eliminate $81 billion in past-due medical debt and use bankruptcy courts to process other existing and future medical debt.
Four things to know:
1. The plan calls for the federal government to negotiate and pay off past-due medical bills in collections that have been reported to credit agencies.
2. The campaign chose $81 billion based on a 2018 Health Affairs study. Researchers found one in six Americans have past-due medical bills on their credit report totaling $81 billion. Fifty-three percent of those bills amount to less than $600 each.
3. The Vermont senator's plan also calls for the end of "abusive and harassing debt collection practices" and instructs the IRS to review the billing and collection practices of nonprofit hospitals to ensure they meet the charitable care standards for tax-exempt status.
4. Mr. Sanders also wants to reform the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 to use the existing bankruptcy court system to provide relief for those with medical debt. His plan would also remove and exclude medical debt from existing credit reports.
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