State lawmakers highlight need to alleviate medical debt

HARRISBURG, Feb. 27 – Today, state Reps. Tarik Khan, D-Phila., and Bridget Kosierowski, D-Lackawanna, held a news conference at the State Capitol to discuss the importance of alleviating medical debt for Pennsylvanians who need it most.

Last spring, the Pennsylvania House of Representatives passed legislation (H.B. 78) that would establish the Pennsylvania Medical Debt Repayment Program, which would target the medical debt of low-income Pennsylvanians drowning in it and in need of relief. The legislation is currently sitting in the PA Senate Health and Human Services Committee.

Medical debt relief is also a top priority for Gov. Josh Shapiro who, in his state budget address for the 2024-25 fiscal year, proposed investing $4 million to wipe it out for thousands of Pennsylvanians.

State officials estimate that roughly 1 million Pennsylvanians carry some amount of medical debt. As of Dec. 2020, Pennsylvanians collectively share more than $1.8 billion in medical debt in a collections stage.

“The toll of medical debt is staggering, with some reports showing that nearly half of all adults in the U.S. have gone into debt due to healthcare costs,” Khan said. “Medical debt makes us sicker because it prevents people from seeking preventative care and in some cases skipping healthcare services all together. It’s time the legislature addresses this issue that plagues countless Pennsylvanians.”

Kosierowski highlighted Shapiro’s leadership on this issue.

“Governor Shapiro gets it. He understands that by implementing the Pennsylvania Medical Debt Repayment Program, we would not only make health care more accessible, but we would also provide a significant boost to our economy by giving families more spending power,” Kosierowski said. “He truly believes that no Pennsylvanian ever should have to drain their entire life savings just to receive quality health care.”

State Rep. Arvind Venkat, D-Allegheny, took the lead on introducing H.B. 78 (along with Khan and Kosierowski). Venkat, who is a doctor, spoke on what inspired him to introduce the legislation.

"Medical debt is one of the leading causes of bankruptcy and costs people's lives," Venkat said. "I introduced the Medical Debt Relief Act to ensure that Pennsylvanians have access to health care without their debt interfering with getting the health care they desperately need. After treating a patient whose medical debt caused her to delay treatment for breast cancer and who, as a result, died, I now carry on her memory as I continue to advocate for medical debt relief. This legislation will help all Pennsylvanians, especially those in rural Pennsylvania where medical debt is the highest. With the Pennsylvania Medical Debt Relief Program – supported on a bipartisan basis in the House and now included and championed by Governor Shapiro in his budget – we can help thousands of Pennsylvanians, aid challenged hospitals, emergency medical services providers, and other healthcare personnel, and reduce a key driver of healthcare inflation. This is a win for every Pennsylvanian that we must enact in this year’s budget."

The legislators said the program’s structure would both carefully target relief to those most in need in an equitable way and avoid the concern that debt relief may incentivize overutilization of healthcare resources or purposefully not paying for healthcare services. They said the program would also improve the finances of healthcare institutions and providers concentrated in urban centers and rural Pennsylvania. These hospitals regularly carry debt on their balance sheet with little likelihood of payment. Such debt affects their ability to deliver on the necessary mission of providing care to those most in need and results in increasing prices for all Pennsylvanians to make up the difference.

This proposal is modeled on efforts at the local level that have leveraged government funds to expand the beneficial impact of medical debt relief for thousands of residents. For example, in Pittsburgh, city council invested $1 million to alleviate residents’ medical debt through a program like that proposed in the Medical Debt Relief Program. For this price, the city can discharge $115 million worth of healthcare debt for 24,000 residents.

The lawmakers were joined by Maggie Lynn, a patient living in Pennsylvania, who has been in and out of the medical system for many years, to share her story of medical debt and why the issue matters to so many Pennsylvanians like her.

Residents can view the news conference in its entirety here: (75) Press Conference: Alleviating Medical Debt in Pa. - YouTube