Welcome to the Anti-Debt Agenda
The average American works ten years of their life just to pay interest.
Americans are routinely forced into debt for education and medical care – which are paid for by taxes in many other nations. Credit cards are a very poor substitute for union cards.
Norwegians, Danes, Czechs, Germans, or Swedes do not need to borrow for college – it is free. The Germans and Dutch do not need to borrow for health care – everyone is insured, and deductibles cannot exceed a few hundred dollars.
As Astra Taylor says: “Working people in America are robbed twice. You’re underpaid at the job, and then you’re charged interest because you need student loans to get an education, and then you’re going into debt for medical care, and you may need other loans just to pay rent or put food on the table.”
Student debt, medical debt, and carceral debts (for bail, probation, and court costs) should not exist at all. These debts are the foundation of what Tressie McMillan Cottom calls “negative social insurance….. it doesn’t actually make us more secure. It only makes our collective insecurity more profitable.”
Our blog will not focus on consumer debts for homes, new cars or flat-screen TV’s. These debts may just reflect bad personal decisions. The existing bankruptcy laws are probably adequate remedies.
What we will oppose are the debts that arise from the lack of social insurance. The creditors here are clearly not entitled to full repayment with interest. We must expand the category of forgivable debts.
As Robert Meister asks regarding student debt: “Why not raise taxes and provide higher education as a publicly funded good that does not depend upon individual access to private credit markets?
“If you add up the lifetime debt service that former students will pay on $1 trillion, over and above the principal they borrow, you could run a very good public university system for what we are paying capital markets to fund an ever-worsening one.”
This blog will discuss and reprint articles on the size of the problem, along with proposed solutions.
Always feel free to provide comments, criticisms, and suggestions.
Recent Blog Posts
Challenge Medical Bills in Small Claims Court
Small claims courts have been a fixture throughout America for over seventy years. In the state of New York, for example, there are Small Claims Courts in each of the 62 counties — including at least one in each of the five boroughs of New York City. Most other states have similar coverage. In small claims court, there is usually a single judge with no jury and no witnesses. The courts are typically informal – designed to make the legal process accessible and affordable. The judge usually asks the plaintiff and the defendant to simply “Tell us your story in…
Medical Credit Cards: Pro or Con?
The most frequent settings for medical credit cards have been dentist’s offices, cosmetic surgery, veterinarians, hearing services, vision services and primary care. However, the cards are increasingly offered to cover surgeries and emergency services provided at hospitals and doctors’ offices. (Some of the newer lenders are owned by private equity, which to me is automatically a call for concern.) The business appeal of these cards is that providers don’t have to be in the financing or debt collection business. They receive full payment quickly. Some products advertise to providers that they’ll be paid in two business days, while others advertise…
Myths of Single Payer
Readers of this blog are aware that I am a strong advocate of health care reform. However, I am very cautious about a total overhaul of our system. I have a low tolerance for bad math and empty promises – which both appear all too often in the promotion of Single Payer. Here are some specific points of propaganda that concern me……….. Myth #1`- Administrative Costs for Providers Will Plummet Single payer advocates have a fantasy where medical staff will spend perhaps 30 seconds to enter claims that are straightforward, never challenged, with no prior authorization required…. Unfortunately, the real…
Anti-Debt Heroes – The Debt Collective
The Debt Collective first formed in 2012 as part of the Occupy Wall Street movement. Early members wrote the Debt Resisters’ Operations Manual , and launched the Rolling Jubilee, a mechanism for purchasing portfolios of people’s debt on secondary debt markets — and cancelling it. In 2015, the Collective organized the nation’s first student debt strike, against Corinthian Colleges, a predatory for-profit college chain. (Note: The Education Department eventually deployed its existing legal powers to wipe out$5.8 billion in debt held by 560,000 students of Corinthian Colleges.) The Debt Collective team today is a mix of staff, volunteers, and advisors that coordinate nationally…
Anti-Debt Hero #2 – Jared Walker
For the last ten years, Jared has headed up a medical charity called Dollar For. At first, he simply raised money to help pay medical bills for low income families. However – he then realized that many of these families could have qualified for free hospital care. Under the Affordable Care Act. non-profit hospitals must waive or reduce charges for lower-income uninsured patients. The hospitals must prove that they are providing a community benefit, thus justifying their tax exemption. (A study in Cook County- Illinois in 2016 showed that hospitals there avoided over $200 million a year in property taxes….
Anti-Debt Hero #1 — Alan Collinge
Alan Collinge has been waging a media war against student debt for about 20 years. He uses news articles, facebook posts, and interviews to further his cause. His organization is called Student Loan Justice.org, and his goal is to get politicians and the media on the side of debt relief. Here is a sample of a recent Collinge communique: “We have to flex this muscle we have. Our opposition is overwhelming the media with anti-cancellation, anti-borrower hit pieces. Will you please step up, and give it a shot in your local newspaper, or a paper in your state? Anyone can do…
In Praise of Medical Advocates
A hospital patient’s first bill is usually for an impossible, back-breaking amount….but typically all the insurers have already negotiated a substantial discount. However — most patients do not understand this. They have no one to reassure them, counsel them, and to fight for them if they have no insurer. Americans are used to fixed prices at Walmart or the grocery store; they do not want to bargain with the doctors and hospitals they must trust with their lives. Patient advocates can be incredibly important. I am impressed by a new firm called Resolve. The idea for Resolve began in 2016,…
High Deductibles Hurt Hospitals, Too
It is not just the patients who can suffer. Medical providers are losing money on deductibles as well. Consider these statistics from Jacqueline LaPointe’s article in RevCycle Intelligence: It’s no wonder that hospitals can sell their old debts so cheaply to collection agencies. Most hospitals are not very aggressive on debt collection. (Thank goodness!) A Johns Hopkins study found that between 2018 and 2020, only 28 out of 414 hospitals in Texas sued any patients at all. Fewer than ten of these hospitals garnished bank accounts and seized patients’ property. Hospitals told the study that litigation is used as a…
Ambulance Debt Should Disappear
If you call 911 and the fire department comes, you will generally pay nothing. In virtually all incorporated cities, the fire department is a public service. It is financed by local government—usually with property taxes. However– if you call 911 for an ambulance, you could be charged over $1,000, even for a short ride. Ambulances are normally not a free public service. In many states the typical balance bill can be over $1,000. It helps to have health insurance, but you must be careful about deductibles and exclusions. A medical emergency can easily put you straight into debt. (Air…
Pending Bankruptcy Reforms Favor Debtors
Pending Bankruptcy Reforms Favor Debtors For many years, typical consumers could choose between filing under Chapter 7 or Chapter 13 of the US bankruptcy code. In Chapter 7—the far faster option—an independent trustee liquidates the debtor’s available assets and makes distributions to creditors. In Chapter 13, debtors contribute their income to a trustee who makes payments under a three- or five-year plan. Chapter 13 cases are often unsuccessful, with fewer than half of filers ultimately getting their discharge. Lawyers generally want to be paid in advance on a Chapter 7 case.This drives many filers into Chapter 13, where attorneys can…
Medical Debt Is Worst In The South
The Affordable Care Act of 2009 required all states to expand Medicaid for the working poor. The federal government would pay all the costs of expansion for three years, and 90% of the cost thereafter. However, this expansion became voluntary after a lawsuit in 2012…..and ten Southern states have still refused to participate. This leads to chronically high medical debt for low-income residents. In conventional economic terms, this resistance is inexplicable: these states are passing up billions of dollars in federal money financed, in part, by taxes on their own residents. Medicaid expansion would boost employment in the health sector,…
Taking a Greedy Hospital to Court
I have been saying for years that healthcare reform will require some far-reaching legal decisions. Here is a relevant true story, brilliantly documented by Dan Weissman in his podcast An Arm and a Leg for April 13, 2023. The story begins with a patient whose doctor recommended a complex back surgery, in order to keep her spine stable. She asked the hospital – well in advance – what this was going to cost her, out of pocket. They ran her insurance and told her: “Your end is going to be one thousand, three hundred thirty-six dollars, and ninety cents.” She…
Debt Relief for Veterans
I was recently shocked to read that U.S. military veterans are carrying billions of dollars in medical debt. We must provide full debt relief for veterans. I had always assumed that the Veterans Administration was a rare American example of single-payer generosity. But here is what I found out. #1 – If a veteran has a service-connected medical condition; and they are more than 50% disabled; and they have very limited means; then all their care at VA facilities may indeed be free. #2 – However, things get very complicated after that. If a veteran’s health concern is not related…
STUDENT LOANS – THE REAL NEWS IS BEHIND THE SCENES
The Supreme Court may rule against Joe Biden’s plan for a $10,000 student loan forgiveness. We should know the outcome by mid-summer. However: The Biden proposals also included a dramatic expansion of Income-Driven Repayments. These repayment changes are ultimately more favorable to debtors than the $10,000 in straight forgiveness. The repayment reforms are in a comment period right now, but are scheduled to go into effect on July 1, 2023 The amended rules offer several big advantages: Abby Shafroth at the National Consumer Law Center wants to see two additional improvements: None of these changes would break the bank in…
Social insurance reduces the need for debt
Monica Prasad’s excellent article for the Niskanen Center in 2019 is entitled: “The Trade-Off between Social Insurance and Financialization: Is There a Better Way?” She comments: “The more a government spends on social insurance, the less likely households are to fall into debt. Social insurance includes pensions, health care, family allowances and parental leave, job training, income support, unemployment benefits, etc. Spending on these policies enables households to build up assets and reduce debt. “The United States offers families more sanctuary in bankruptcy – but at the same time it permits a wide-open consumer credit economy coupled with less protection…
Assault Victims Need Protection From Debt Collectors
The Nebraska legislature is reviewing a law that would prevent any medical provider from harassing an assault victim over the medical care they receive for their injuries. The state does have a Reparations Fund, but over half the applicants are denied. Survivors of sexual and domestic assault are getting threats of collection. It is repulsive to think that this law is even needed, but all we can do is support it. Sen. John Frederickson deserves the credit for introducing LB 315.
“Never Pay The First Bill” — fighting medical debt
ProPublica reporter Marshall Allen has written a great book on how to deal with medical debt. In “Never Pay the First Bill (and Other Ways to Fight the Health Care System and Win)” he likens today’s health care system to a bully – squeezing and taunting the consumer. In a moment of candor, a hospital finance department official told him that “our bills are largely fiction” and that “most hospital bills are routinely marked up higher than the actual cost.” Allen notes that insurance companies are more concerned with keeping the hospitals and doctors in their networks, than with the accuracy of…
The Fine Print in Student Loan Forgiveness
There are several encouraging “extras” in Biden’s August announcement of $10,000 student loan forgiveness. #1. The income-based payment rate for undergraduate loans will drop from 10 percent of discretionary income to just five percent. #2. The Department of Education will raise the amount of income considered non-discretionary. (This is an allowance applied before income-based payments are even calculated.) As a result, borrowers earning under 225% of the federal poverty level will likely not have to make a monthly payment at all. Even those earning more than $50,000 right after graduating would face trivial payments. #3. Under proposed rules, the government…
Good news! California is reducing carceral debt
When any of us are charged with a crime, we could be faced with a flood of financial charges – even if we are ultimately acquitted. There are charges for processing arrests, for “rent” while in jail, and a potential fee up to $90 a hour for the use of a public defender. Later, there may be more charges for administering probation, and for maintaining home detention programs. Our system criminalizes people for not having cash on hand. Predictably, private companies profit from this unjust arrangement – charging incarcerated people and their families for phone calls, email, commissary, bail, probation, and…
Who is Profiting from Student Loans?
Americans naturally want to find good jobs; and they believe (with reason) that their most reliable asset is a college or trade-school degree. We could be helping nearly all of them with free or low-cost colleges and vocational schools. But that would mean higher taxes, and less revenue for educational profiteers. Professors Louise Seamster and Tressie McMillan Cottom are doing wonderful work in this area. They recently appeared on Ezra Klein’s New York Times podcast on 11/02/2021….. They describe for-profit colleges as a “negative social insurance program”. “Unlike actual social insurance programs,” Cottom explains, “negative social insurance doesn’t actually make…