It's Not Socialism When You Take Care Of Citizens

The primary role of government should be serving the welfare of its people

Once upon a time, it seemed like the GOP’s goal was to bankrupt Americans with medical debt. The idea was to keep everyone in the middle class on down scared, stupid, and broke. And it’s seemed over the past few years as if the diabolical Republican plan was on its way to succeeding. Americans were being prevented from buying homes. They were being forced from homes. They were even being denied the opportunity to rent homes in some cases.

Republicans were well on their way to creating a permanent underclass of poor people. These people would be too busy fighting one another for table scraps to notice that the real culprits behind their enforced poverty and hunger were the puppet masters of the GOP and their billionaire donors. Republicans and their oligarch benefactors figured that if the poors were busy fighting for survival, they’d never learn who their real enemy is.

Slowly, people began to realize the impact medical debt was having on the quality of life for millions of Americans. They began to investigate how they might push back against the forces holding people down. Just as they were beginning to become frustrated with their seeming impotence, institutions like government bodies became interested in the cause. Cities like Toledo, OH, began to realize that a government with large amounts of money behind it stood a chance of breaking down the defenses of corporate and Republican greedheads.

And so it was that Toledo began to take on the problem of medical debt. And they weren’t alone

Too many people in this country avoid going to the doctor because they owe medical debt. (Including me at one point!) Too many people can't buy houses because they owe medical debt. Often, the reason for this medical debt was that they found out after the fact that their insurance didn't cover a very basic thing they needed, like blood tests. For some reason, a surprising number of insurance providers don't cover the very basic blood tests doctors ask for in order to determine if patients have anemia or a vitamin deficiency or a thyroid issue or whatever else.

So Toledo, Ohio, did something pretty awesome: it decided to take $800,000 it got from the American Rescue Plan Act, plus $800,000 of its own money, and cancel $120 to $200 million of medical debt for residents of Toledo and Lucas counties. As expensive as medical debt is to have, it's very inexpensive to buy.

Once the hospital or doctor's office (or credit card company or anything) gets tired of bugging you to pay your bill, they allow collection agencies to buy it for pennies on the dollar, allowing them to then harass you for the money and then profit.

According to RIP Medical Debt, the organization through which the city is working to buy up the debt, and which has been buying up medical debt around the country for several years now, one dollar can buy up $100 worth of medical debt.

Sure, I could restate the obvious- that medicine in America is a capitalist clusterf**k having little to do with patient care (in the macro sense, of course). Since my wife is a nurse practitioner and most of my friends are in the medical profession in various iterations, I feel qualified and well-informed enough to state the obvious. People at her level- delivering health care- are deeply committed to the well-being of their patients. It’s those above them who’ve come to see medicine in terms of dollars and cents. And that’s where the problems begin.

But not even medical science has cracked the nut the bedevils businesses of all shapes and forces- dealing with accounts receivables. In medicine, where services are often provided before ability to pay is verified, this can be a serious problem (for example, you can’t repossess a transplanted kidney). Most hospitals write off a certain amount of charity care for indigent patients, but some either can’t or won’t pay their bill. So, as with any other bill, once a receivable ages enough (uses 90+ days due), it gets farmed out to a collection agency.

Collection agencies purchase medical debt, sometimes for pennies on the dollar. Sometimes they’ll pay a percentage of what they collect back to the medical provider, but medical debt, being unsecured, can be difficult to collect. Outside of the power of persusasion and the threat of adverse credit reporting, an agency has little chance of collecting on a medical debt, which can be in the hig five- to six-figures.

Uncollected medical debts aren’t free of consequences to those who owe them. They’re reported to credit reporting agencies and thus can adversely impact a person’s credit rating. That rating can impact their ability to buy or rent a home, buy a car, or even get a job.

So when Toledo and Lucas County teamed up to tackle medical debt, it was a big deal.

Councilwoman Michele Grim, who spearheaded the measure, said it would use less than 1% of the city’s ARPA funds.

RIP Medical Debt would work with hospitals to purchase debt in bundles at a discounted rate, eliminating medical debt for many people. The longer debt goes unpaid, the cheaper it is for RIP Medical Debt to purchase. Grim said that could wipe out decades of debt.

“It’s not anyone’s fault that they get sick. It’s not anyone’s fault that they get injured. It’s not anyone’s fault that maybe their anesthesiologist for their surgery is out of network,” Grim previously told 13abc. “Everybody has the potential to have medical debt.”

Councilwoman Grim is right, of course. Everyone has the potential to get hit by medical debt. And the cost of medical care being what it is, that debt can add up quickly and to the point where it’s beyond the control of one person. It’s even worse if that person can’t afford health insurance.

For $1.6 million, then, Toledo and Lucas County bought up

$120 to $200 million of medical debt for residents of Toledo and Lucas counties. As expensive as medical debt is to have, it's very inexpensive to buy.

Medical debt can be commoditized like any other type of debt. And since it’s difficult to collect, it’s value on the open market isn’t terribly high. Hence, the ability for anyone to purchase it for pennies on the dollar.

Toledo actually got the idea from Chicago and Cook County, which in July decided to use $12 million of the funds they got from the American Rescue Plan Act to buy up $1 billion worth of medical debt for the city's residents.

It's an incredibly smart way to use that money. One-hundred million people, 41 percent of all US adults, owe some amount of medical debt, with the average amount owed being about $2,400.

Yes, it’s incredibly smart and also very efficient. Not only does purchasing the debt get it off the medical provider’s books, it also shows on individual credit reports as satisfied debts. It’s a “win-win” situation for a relatively low investment.

Of course, the most sensible way to handle medical debt would be not to have a system that forces Americans to live with massive medical debt in the first place. That would mean having a single payer system in which the government was responsible for paying for medical care.

Alas, that conversation will have to wait for another time. Until then, cities like Toledo and Chicago can serve as an example of what can be done when cities look for creative solutions to help their residents out of financial morasses dug by medical debt. It’s sad that it’s come to this, but when you have a system in which one party actively works to keep the poor and middle class in debt, you work with what you have.

Poverty doesn’t have to be permanent, nor does it need to be a revolving trap door that keeps a person without hope of recovery or improvement. If the primary role of government is to help its citizens- and I believe it should be- than Toledo, Lucas County, and Chicago are setting an example cities across the country could stand to follow.

Poverty should be a temporary problem in search of a solution, not a terminal condition with no hope of a cure.