Medical Debt Forgiveness Plan Rejected by Republican: 'Band-Aid'

A Republican lawmaker called medical debt forgiveness a "Band-Aid" approach to America's ongoing health care cost crisis.

Senator Bill Cassidy, a Louisiana Republican and ranking member of the Health, Education, Labor, and Pensions (HELP) Committee, spoke against a one-time cancellation of medical debt during Thursday's hearing on the issue.

"To be clear, a one-time cancellation of medical debt is not a solution," Cassidy said. "It is a Band-Aid approach for a one-time problem that's going to come back. Don't just do something—think."

While more than 90 percent of Americans hold some form of health insurance, the country owes more than $250 million in medical debt.

Cassidy said while Democrats have proposed canceling medical debt in its entirety, that would shift the problem onto taxpayers.

"We think it's free," Cassidy said. "It's not free."

"A health care system in which you think is free because the taxpayer is footing the bill...You've never seen how expensive something can be until you perceive that it is free."

Those who face medical debt were more likely to carry other types of debt and otherwise be financially vulnerable, according to health research firm KFF. In a recent KFF report, 72 percent of those with medical debt also had a credit card balance, and 58 percent said they were just getting by financially.

Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, said while it may pain many Americans to hear, a one-time cancellation of medical debt would indeed be a "temporary Band-Aid."

"It doesn't prevent them from accruing further medical-related debt, which many do, and one could say it also holds out hope for cancellation of further debts down the road that never materialize," Beene told Newsweek.

A better solution may lie in federal and state efforts to expand existing services like Medicaid and Medicare.

"With expenses such as these, it's hard to issue forgiveness through public service or timed payments like student loans," Beene said. "Government can work to make sure those in the future don't accumulate the medical debt the prior generation has."

Americans tend to be more in favor of erasing medical debt than student loan debt, as a recent University of Chicago and Associated Press study found 51 percent of Americans said it was "extremely" or "very" important for medical debt to be forgiven, compared to just 39 percent for student loan debt.

"Debt forgiveness can provide crucial immediate relief, but it needs to be one piece of a much larger puzzle," Michael Ryan, a finance expert and the founder of michaelryanmoney.com, told Newsweek. "I've seen it way too often where medical debt can devastate families, even those with insurance."