VP Harris, HHS Secretary Becerra announce actions to reduce medical debt 4/11/22 Transcript

Speaker 1: (00:00) We don't choose when and how to accrue it. When that terrible moment comes, when you're in the hospital facing an acute threat to your health and your family's health, you rarely have the ability to choose how much care to receive, based on its cost. That reality creates incredibly burdensome and inequitable outcomes. Three quick examples, first, the elderly. Research shows that older adults with medical debt frequently reduce their use of medical care and this results in a devastating spiral. Further healthcare challenges, further financial strain, and ultimately higher costs on the healthcare system as a whole. Women, on average women in America require more healthcare and they pay more for it. For instance, women are more likely to shoulder higher expenses related to childbirth. As a result, women end up with more medical debt and you couple that with the structural inequities, like our gender pay gap, and medical debt poses a unique threat to women's health and economic security. Speaker 1: (01:02) Third, young people. Young people use less healthcare, but they're actually more likely to get medical, to be indebted because of medical expenses, in part because they're less likely to have health insurance. This creates a different type of spiral. Early on in people's lives, compounding debt at formative working ages, worsens their prospects for long term financial stability. Medical debt is burdensome and inequitable, but it's also special and unique, in that it's a uniquely bad predictor of someone's credit quality. Research has shown that those with medical debt are no less likely to repay a loan than those without. And yet, if you have medical debt on your credit score or in an underwriting process, it can make it much harder for a person with medical debt to buy a home, or start a business. Speaker 1: (01:55) Put simply medical debt is not like buying a home. It's not like buying a car. This is debt that Americans bear for getting sick or caring for loved ones, and it's far past time that we change our practices as a federal government to reflect that. That's what today is about and that's why today it's so important that you will hear from leaders that cut across this administration. Secretary Becerra, Director Young, Director Chopra, Secretary [Brognoth 00:02:21], Deputy Secretary Remy and last, but certainly not least, the Vice President of the United States. This is not your typical gathering for a healthcare event in this administration. That's because medical debt is a broad and far reaching economic challenge facing the country. Speaker 1: (02:38) Today we're sending a clear signal that the Biden, Harris administration will do everything in its power to reduce the burden medical debt on families, reduce the role that medical debt plays in access to credit and by doing so, increase economic security and economic opportunity for millions of families. I want to thank all the agencies and agency heads that came together to make today's announcement possible and all of their staff who put in the work to get us here and for all of their effort in making good on the commitments that we are announcing today. Thank you very much. Speaker 2: (03:19) Please welcome Department of Veterans Affairs, Deputy Secretary Donald Remy. Donald Remy: (03:31) Hey, thank you all for being here. Thank you everyone for allowing me to participate in this most historic conversation and event. I'm honored to be part of the dialogue and I'm honored to be part of the action that's occurring all across our federal government right now, led by the president and the vice president. President Biden often says that our nation's most sacred obligation is to prepare and equip our troops when we send them into harm's way and to care for them and their families when they return. The second part of that sacred obligation, caring for vets and their families, is our promise to keep at VA. Doing so has never been more important than it is right now, than it has been during this pandemic. Donald Remy: (04:25) First and foremost, that means providing world class healthcare for veterans during this challenging time. We've done that, providing more to more veterans, more care to more veterans than we have ever before. But, it also means making sure that those veterans can afford the care they're receiving. That they don't have to choose between paying a bill and receiving the healthcare that they so desperately need. Fortunately, we've been able to all but eliminate that terrible for vets as well. Thanks to the American Rescue Plan, we were able to suspend all co-payments for medical care and pharmacy services from April 2021 to September, April 2020, excuse me, to September 2021. A move that directly benefited more than 1.5 million veterans and saved them approximately one billion dollars. Donald Remy: (05:28) VA also took steps, publishing a final rule to effectively end reporting of unfavorable veteran debt, including VA medical debt, to credit agencies. Meaning that medical debt will no longer impact veteran's credit scores, or hinder their ability to buy a house, or to get a car, or to build lives that they want and need. Now the vice president and her leadership, through that leadership, we've been looking into challenges that veterans face when applying to have their medical debt fully forgiven. This process has long been overly burdensome, making it difficult for vets to apply for that much needed relief. Sometimes it even deterred them from seeking relief at all, and that's unacceptable. Donald Remy: (06:20) We're reviewing our underwriting practices for our VA loan program, to make them more amenable to our veteran community. And look, those are just a few of the things that we've sought to ease the financial burden on vets during the pandemic. The bottom line is that vets always step up for this country when we need them most. But, COVID is one of those times when veterans have needed us the most, when vets need us to step up for them. And thanks to President Biden, Vice President Harris, Secretary McDonough, the entire administration, that's exactly what we've been able to do and what we will continue to do. That's exactly how we're focused on making sure our veterans have what they need, because no veteran should ever have to choose between lifesaving healthcare and putting food on the table for their families. On our watch, they never will. Thank you to a great VA staff, Joanne Choy and Josh Jacobs and others. Thank you again, for having me here today and thank you for your steadfast support for our veterans. Speaker 2: (07:44) Please welcome Director of Consumer Financial Protection Bureau, Rohit Chopra. Rohit Chopra: (07:53) Thanks everyone. One of the things that shouldn't really happen in America is when you get sick, people should extend a hand to help. They shouldn't be kicking you down. One of the things that many people who get sick feel like, is that the system is out to get them. They feel like no one actually wants to help and they erect barriers and red tape and other problems for them. The CFPB a few weeks ago, released a study showing that 43 million Americans had allegedly unpaid medical bills on their credit report. Our credit reports are not supposed to be a place for rumors and innuendo. It's supposed to be an accurate record of your financial picture. But, so many of us are worried that credit reports are now being used as a weapon to coerce people into paying bills that they don't even owe. Rohit Chopra: (09:05) So many of us have dealt with it personally, the doom loop between the insurance company and providers. You feel at a loss at every single moment. What do you do when you get it on your credit report? You sometimes just surrender and pay. This is really not how the system is supposed to work. The credit reporting system is not supposed to be a weapon. At the Consumer Financial Protection Bureau, we're going to be taking a number of actions, along with others in the government, to make sure that when you get sick and when you have medical bills, you are not kicked when you're on the ground. We are looking at everything, including whether it's even appropriate for allegedly unpaid medical bills to even be on the credit report at all. I want to encourage everyone to visit consumerfinance.gov/... Rohit Chopra: (10:01) ... to visit consumer finance.gov/medical debt. We have resources and tools for consumers, and it's also a place where you can file a complaint when you're having a tough time dealing with Equifax, Experian, and TransUnion, or a debt collector asking you to pay a bill you don't even owe. So we need to all work together across the government to make sure that medical debt is not something holding you back from getting a better job, from finding housing, or to get credit. More and more people are asking, what is on your credit report and people are being disqualified because of inaccurate information on them. So it's going to take all of us and it's going to take everyone to speak up so that we can hold bad actors accountable when they violate the law. Thank you. Speaker 3: (11:06) Please welcome OMB Director, Shalanda Young. Shalanda Young: (11:16) Thanks for having me here and thanks for the vice president for bringing us all here today to bring a whole of government approach to this very daunting issue. Medical debt is a longstanding problem for millions of Americans, and it's only gotten worse during the pandemic. One in three US adults are saddled with outstanding medical debt. It's become the biggest source of debt and collections in our country, bigger than credit cards, utilities, auto loans, and other sources combined. This debt is an anchor that weighs down our families, our economy, and our country. It's long pass time that we do something about it. Shalanda Young: (11:55) Under the leadership of President Biden and Vice President Harris, this administration is committed to stopping medical debt from ruining lives and holding American families back. We can do that by influencing how medical debt is treated when making lending decisions in the federal credit programs. People can't live to their full potential if they have bad credit. They can't buy a car. They can't buy a house, they can't start a business. That's what happens with a medical debt. It takes one nightmare for a family and makes it all worse. Shalanda Young: (12:28) Over the last few months, my team at OMB has been working with our agency partners, some of whom you've heard from today to identify steps we can take at individual agencies and government-wide to reduce the negative impacts the existence of medical debt has on families' abilities to access federal credit programs. Life happens, and it's time for families to stop paying the price for the rest of their lives. Thank you so much. Speaker 3: (13:07) Please welcome Department of Agriculture Deputy Secretary, Jewel Bronaugh. Jewel Bronaugh: (13:16) Good afternoon. I am delighted to be here today for such an important conversation. Rural America provides our nation's food and energy resources, produces the fiber for goods in manufacturing, contributes more than 35% of our nation's military members, and operates about 80% of the nation's critical infrastructure lifelines. Unfortunately, it is also where the country's majority of underserved communities and persistently poor families reside. Doing right by rural America and rural communities is an important component of this administration's commitment to advancing equity. Rural people and places are central to USDA's mission and we're taking bold action to promote rural prosperity and economic development by providing technical assistance and financial investments, in rural water, electricity, broadband, housing, community facilities, local and regional food systems and rural businesses and cooperatives, and by collaborating with communities to increase economic opportunities in underserved communities. Further, USDA is advancing equity in ensuring investments and services are going to those who need the most. Jewel Bronaugh: (14:41) USDA's investments in rural and tribal communities are inherently aligned with this priority and even more so when those investments are in persistently poor, socially vulnerable or high need places. That's because this administration understands that when rural America thrives, all of America thrives. USDA's rural development offers a suite of programs that provide rural communities, businesses, and individuals with access to affordable financing and other supports for essential infrastructure, water, broadband, energy, hospitals, schools, businesses, and more. Jewel Bronaugh: (15:26) Of note for today's conversation is that USDA also provides rural households with access to affordable financing for the purchase of a home. Under our rural housing service, we have approximately 1.2 million home owners who participate in our program, 200,000 being direct borrowers and approximately one million guaranteed borrowers. USDA has worked closely with the VA and HUD over the past year to provide mortgage relief to borrowers and USDA is consistently looking for ways to meet the needs of our customers in rural households, seeking a chance at home ownership. Jewel Bronaugh: (16:08) To that end, USDA is weighing in on how we can create greater financial security for rural America and address rising amounts of debt that may impact access to credit, a home loan application, and even impact employment opportunities. USDA recognizes that it is critical to use accurate predictors in evaluating a borrower's ability to repay. However, for far too long, entities have used less predictive factors like medical debt, which have turned away borrowers who may have had the ability to repay. Jewel Bronaugh: (16:47) USDA acknowledges that medical debt has great impacts in underserved rural communities. We are grateful to work alongside our federal agencies here. I look forward to hearing more from Vice President Harris today, and I am thankful for her leadership in being a champion for rural communities. We're honored to be here alongside the White House and our partners today. Thank you so much for this opportunity to speak. Speaker 3: (17:31) Please welcome HHS Secretary, Xavier Becerra. Xavier Becerra: (17:43) Good afternoon. We're here really because of one simple fact, too many families across our country are saddled with crushing medical debt. This debt often forces families into making impossible choices. Do I pay off my debt? Do I purchase that lifesaving medication? Or do I put food on the table or pay my rent or my mortgage? No family should have to make that choice. Xavier Becerra: (18:17) The Biden, Harris administration is committed to making healthcare not only more affordable and accessible to Americans, but also one that will advance policies that help reduce the burden of medical debt on all of our households. American households hold an estimated $90 billion to $200 billion in medical debt today. Medical debt surpasses collections from credit cards, utilities, auto loans, and so much more, but we know that medical debt means more than just a burden to your pocketbook. It means a burden to your psyche, to the wellbeing of your family. Xavier Becerra: (18:59) Unfortunately, this burden is not shouldered equally in America. Too many Americans with lower incomes, poor health, and from communities of color have higher rates of medical debt. It is a painful truth for too many families, some two-thirds of debtors, medical issues, medical challenges, and medical debt contribute to personal bankruptcy. Xavier Becerra: (19:29) So at HHS, we're not waiting to act. We know the best way to prevent medical debt is to get more Americans covered by health insurance. Today because of the leadership of President Biden and Vice President Harris, more Americans have health insurance through Medicaid and the marketplace under the Affordable Care Act than ever before. That includes a record shattering 14 and a half million Americans who secured health insurance coverage through the Affordable Care Act since November 1st. Another tool to shield Americans from oppressive medical debt is to protect ... Xavier Becerra: (20:03) To shield Americans from oppressive medical debt is to protect them against unwarranted surprise medical bills. This year at HHS, we started to enforce a new law, the No Surprises Act, that protects Americans from being broadsided, surprised by unexpected medical bills. We're going to be vigorous in enforcement of that law. At the direction of President Biden and Vice-President Harris, we're going to work with our public and private sector partners in healthcare, to examine even more ways to address medical debt and help lift this weight off billions of families. This is not just about healthcare. It's about economic security, and most of all, it's about peace of mind. This is an administration committed to tackling medical debt, and giving Americans the peace of mind they deserve. Thank you. Speaker 4: (22:27) Please welcome [Alexander Sintau 00:22:30]. Alexander Sintau: (22:40) My name is Alexander Sintau. I'm a 25-year old from Washington DC, and serve in the United States Coast Guard for two years. November 2019, I was suddenly diagnosed with idiopathic cardiomyopathy, underwent multiple open-heart surgeries followed by complications, which resulted into months in ICU stay. I was put on ECMO and finally received surgical clearance to get my LVAD in March of 2020. I was then transferred to the National Rehabilitation Center in June of 2020, where I received extensive physical therapy. I had to relearn how to complete normal day-to-day tasks. Alexander Sintau: (23:12) In addition to the difficult recovery process, I found myself having to cope with the overwhelming medical debt. My family's attention was rightful on whether I would make it and heal. My father received repeated phone calls and notification requests for payments that we did not have. My family started a GoFundMe in the hopes of being able to cover at least a proportion of the medical debt. My community came together to support me and raised over $100,000. And I'm forever grateful for that. That support from my community helped alleviate the intense financial burden I found myself shouldering. Alexander Sintau: (23:55) Now more than two years after my original diagnosis, I know what it's like to live under the crushing weight of medical debt. People should not have to rely on the GoFundMe to be able to afford the cost of healthcare. People and their family experience medical issues should not have to burden or worry about managing medical debt and their quality of care should not be contingent on whether they're able to shoulder the burden of the cost. Alexander Sintau: (24:24) As a result of the Affordable Care Act, I no longer have to worry about my medical debt. Rather than fixating on the overwhelming cost of my medical care, I can now focus on my continued recovery. My hope is that the existence of policies such as the Affordable Care Act can remove considerable barriers for many people and make medical care accessible and equitable for all. Alexander Sintau: (24:52) Additionally, I'm grateful for the work being done to combat medical debt once it's been relieved, the last thing my family and I were focused on during my medical recovery, responding to bill collection, seeking payments. I'm grateful that people who face similar situations like me will have the help in the future so they can spend more time focused on their recovery than worrying on how they will pay their medical bills. I feel truly blessed for this opportunity to share my story with you. And I am honored to introduce Madam Vice-President Kamala Harris, to hear what the Biden-Harris Administration is doing to help others struggle to pay their medical debt. Jewel Bronaugh: (25:48) Okay. Can we hear it for Alex? Please have a seat. Can we hear it for Alex? Thank you, Alex. Jewel Bronaugh: (25:59) I was saying to some of my team in the back, I mean, Alex, first of all, thank you for the courage of telling your story. It's a story that so many in our country can tell. And he really highlights an important facet of this issue, which is, necessarily when we're talking about that much debt, it's because there has been the need for a lot of medical care. And invariably then, anyone who has needed that level of medical care over that period of time should be allowed the dignity of being able to focus on their recovery and not in addition to the burden of recovery deal with the burden of debt associated with a medical need. That really does... Alex, you really hit it on the head in terms of what is at the very essence of this issue in terms of the overlay between the issue of medical care, dignity, and debt, unfair debt, the accumulation of debt that really in so many ways, paralyzes so many people. Jewel Bronaugh: (27:19) So Alex, your story is a reminder of the tremendous burden that medical debt forces on so many people. And today it is my honor to be joined by a group of leaders who are fighting to ease that burden, members of our cabinet and our administration, advocacy groups, and healthcare professionals. So thank you all for being here. Jewel Bronaugh: (27:43) The president, and I know that one of the biggest challenges facing working families today is the rising cost of living. Helping Americans lower their monthly bills is one of our administration's top priorities. And that is why we are here today. There are so many people in our country with stories like that of Alex. So many people, some of whom you might know who were rushed to the hospital because their appendix burst or because they took a nasty fall and who are still paying off the bill years later. Parents who have sat in a hospital parking lot afraid to bring their child through those sliding glass doors of the emergency room, because they knew if they walk through those sliding glass doors, they may be out thousands of dollars that they don't have. Jewel Bronaugh: (28:39) Seniors who have to cut their pills in half because they cannot afford more medication. Now, remember, they're cutting a pill in half, but they've been prescribed for the sake of their health and wellbeing that they need to take the whole pill. So let's think about what that means in terms of their health condition and who, because they cannot afford to actually take the full prescription, cut that pill in half and then get sicker and sicker as a result. Family members with a chronic condition, such as heart disease, cancer, or diabetes that requires regular treatment and care, treatment and care that can cost hundreds or thousands of dollars a week, which most people cannot afford. Jewel Bronaugh: (29:33) In fact, one in three adults in our country struggles with unpaid medical bills, one in three, and of those adults, a disproportionate number are black or Latino. I have met so many people in so many communities in our nation who are struggling with this burden, many of whom are managing an illness or an injury at the same time, and who stay up at night, staring at the ceiling, wondering if they- Jewel Bronaugh: (30:03) Stay up at night, staring at the ceiling, wondering if they will ever be able to pay off their medical debt. No one in our nation should have to endure that. No one in our nation should have to go bankrupt just to get the healthcare they need. And that is why our administration is prioritizing this issue of medical debt. First, by taking action to protect consumer rights. When I was attorney general of California, I drafted and helped pass what we named the Homeowner Bill of Rights, to protect consumers from predatory lending and unfair foreclosure practices. It was one of the first bills of its kind in our country, and the purpose behind that bill was quite simple. Homeowners must be informed of their rights and those rights must be protected. The same of course is true when we are looking at this issue. Folks need to have the rights and if they're not there, let's put them into law and let's also make sure their rights are protected and that they are informed of their rights. Jewel Bronaugh: (31:16) For example, on this issue of medical debt, we know that many people are not aware that they have a right to dispute inaccurate charges on their medical bills, or how to file such a dispute. Which is why today the Consumer Financial Protection Bureau is launching a new public education campaign to help consumers understand and take full advantage of their rights. Our administration is also taking action against the bad actors, the folks who violate consumers' rights to force people to pay medical debt. Some debt collection companies harass consumers with dozens of phone calls a week. Remember what we are talking about. Folks who are in the process of attempting to recover from an illness, for example. Debt collectors that try to collect on debt that has already been paid. Some who pose as law enforcement officials or threaten consumers with jail time. That sort of harassment and intimidation is unethical, and often it is illegal. And that is why the CFPB has made it a priority to hold debt collectors accountable. Jewel Bronaugh: (32:36) Our administration is helping Americans pay off their medical debt also. Since the beginning of the pandemic, the Department of Veterans Affairs of has canceled or refunded about 1 billion in medical co-payments for over one and a half million veterans. Many more veterans are eligible for debt relief, but the process to apply is often consuming in terms of time and confusing in terms of understanding how it works. The application also can only be completed on paper as it currently exists, and it requires veterans to submit a lot of documents to prove... Bless you. To prove their income and eligibility. Jewel Bronaugh: (33:24) So this is why the VA, under the great leadership of all those who are here, has decided to streamline the process for applying for debt relief. Often what they are doing is understanding that we have to make it easier. We have to make it easier. And we have the ability to do that. So part of what they are doing is offering a new, easy to use online application, and they're setting a simple income threshold for eligibility. So if you are a veteran who has medical debt, please go online and consider applying. And if you know a veteran, please make sure that they are aware of this opportunity. Jewel Bronaugh: (34:09) We should be clear. Most people with medical debt want to pay it off. To do so they need financial resources. And too often having medical debt can be an obstacle to accessing those resources. This is in large part because of the negative effect medical debt can have on credit scores. Credit scores. So credit scores essentially are supposed to measure how responsible you are with your money. That's what it's supposed to do. So somebody can decide if you are a good bet, if you want to borrow money so that people can decide, are you entitled to certain benefits, if you are responsible with money or maybe not entitled to those benefits, if you're not responsible with money. Having medical debt because you are sick or injured should not lower your credit score and make it more difficult to secure the help you need to get out of debt. It's not logical. Jewel Bronaugh: (35:15) Last month, the three largest credit reporting agencies announced that they will no longer include medical debt in credit scores. If an individual has paid their debts, has unpaid debts less than a year old, or has accrued less than $500 in debt. This is an important first step forward, and one that the president and I applaud. Credit reporting agencies must continue to work toward completely erasing the effects of medical debt on credit reports, and our administration intends to keep an eye on that progress. At the same time, our administration has directed federal agencies, whenever possible, to eliminate medical debt as a factor in accessing federal resources. For example, the Department of Agriculture is leading the way by no longer considering medical debt when guaranteeing loans through its rural housing service. Jewel Bronaugh: (36:17) Medical debt makes it more difficult for so many people to afford the necessities of life, to pay the rent and the car bill, to keep the lights on and put food on the table. President Biden and I believe that every person has a right to affordable healthcare. That is why, in addition to the announcements we are making today, we are continuing to fight to improve financial assistance under the Affordable Care Act, to close the Medicaid coverage gap, and to empower Medicare to negotiate lower prescription drug prices for all Americans. And that is why we will also continue to fight so that all people have the opportunity to succeed and to thrive, free of the burden of medical debt. I thank you all again, all the leaders who are here, all the folks that you help, all the people that benefit from your hard work. Thank you all and take care. Thank you.