Bernie Sanders releases plan to eliminate $81B in past-due medical debt

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Democratic presidential candidate Bernie Sanders released a plan Saturday to eliminate $81 billion in past-due medical debt, going a step beyond his primary rivals who have called for a government-run health insurance program.

“In America today, it is unacceptable that one out of every six Americans have past-due medical bills on their credit report, totaling $81 billion,” Sen. Sanders, I-Vt., said in a statement, adding: "It is immoral and unconscionable that families across the country are being evicted, having their heat disconnected, or having their already-inadequate wages garnished because of crippling medical debt while the health care industry made more than $100 billion in profits last year."

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Under his plan, Sanders said, the federal government would step in for the individual to negotiate and pay off past-due medical bills in collections reported to credit agencies.

Sanders also vowed to create a public credit registry to replace the three for-profit credit reporting agencies in order to, as he put it: “remove the profit motive from assessing the creditworthiness of American consumers.” He said the registry would use "public, transparent algorithm to determine creditworthiness that eliminates racial biases in credit scores."

The self-described democratic socialist added that he would exclude medical debt from credit reports and end credit checking for rental housing, employment, insurance and other non-lending practices.

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Sanders made no mention in the proposal of how he planned to cover the $81 billion cost. According to Reuters, the Sanders campaign has said they would pay for the debt elimination proposal through a tax on corporations based on their pay for chief executives. The details of that proposal have not been released.

During an interview with Fox News Sept. 3, Sanders acknowledged that $81 billion is "a lot of money," but he added, "Compared to what? Compared to the $1.5 trillion that Trump gave in tax breaks to the one percent and large corporations. Compared to the billions of dollars that we spent bailing out the crooks on Wall Street 11 years ago. It is a lot of money but I think it’s the right thing to do.”

Sanders was one of the earliest supporters of “Medicare-for-All,” which would replace job-based and individual health insurance with a government-run plan. Other top Democratic rivals have expressed interest in a toned-down version of Medicare-for-All. Sen. Elizabeth Warren, D-Mass. has endorsed Sanders' plan but said there may be different ways to achieve coverage for all. Former Vice President Joe Biden has called to extend the Affordable Care Act by adding a public option.

Sanders has also released a plan to eliminate $1.6 trillion in student loan debt while also making public college tuition-free.

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As for where he draws the line in wiping out debt, Sanders in his Sept. 3 interview said "there's a difference" between wiping out medical debt and credit card debt. "I don't believe we wipe out credit card debt. You want something, you pay for it.," he said. "If you want to go out and buy a fancy house, you want to go out and buy a yacht, and you go in debt, hey that’s your decision…But I do believe we have to make a distinction. Getting cancer is not your decision. And I think we have a moral obligation to do everything we can to cancel that debt.”