The Biden administration’s creepy old white van is circling the neighborhood again, offering voters free candy if they’ll just climb inside. This time, Biden officials are using medical debt cancellation to entice their victims. 

Earlier this year, the administration proposed a new rule under the Consumer Financial Protection Bureau that would prohibit medical debt from being included in a person’s credit score. At that time, President Joe Biden’s team claimed medical debt was a poor predictor of whether someone is likely to repay a loan and that people should not be blocked from renting an apartment or getting a car loan due to these balances. 

For the record, those balances total $49 billion spread across roughly 15 million people. 

Now it seems Biden officials are taking it a step further, and while neither idea is rooted in sound economics, the latest iteration of their plan is particularly bonkers. Not only would this debt cancellation have devastating implications for our healthcare system, but it would compound the root causes that have made healthcare so pricey in the first place. 

In practice, this proposal has the same problems as other debt cancellation plans Biden has pushed, such as student loan debt. The reasons for skyrocketing prices in both higher education and healthcare are the same: the government hijacked a free market system, restricted supply, and inflated demand. That leads to crazy prices no one can afford every single time. 

Canceling debt is infeasible. The government is not Daddy Warbucks who can come in and wipe away your problems. So what Biden really plans to do when he pushes these kinds of measures is to spread that debt around, forcing people who’ve done the right thing, paid their bills, and made responsible choices to shoulder the consequences of those who have not. 

Not to mention, such a policy would eliminate the incentive for people to repay their debts even when they can. (Despite cash in hand, I waited almost two years to pay off my remaining student loans on the off chance Biden were to succeed in canceling that debt.) 

Healthcare companies are not just going to shrug their shoulders and walk away from $49 billion, not to mention the future medical debt that would be included in this. Instead, those costs would merely be passed onto the rest of us in the form of higher prices in general for services. 

Ultimately, this would encourage companies to raise their prices further, which is the last thing we need in this sector, while also encouraging fewer providers to go into business in the first place. Who wants to take on medical school debt, crazy long hours, and all the stress of becoming a doctor to enter a field where people don’t even have to pay for your work? 

Less supply, more demand. Like I said, a compounding of the problem that created the mess in the first place. 

People do not need their medical debt canceled, and to do so would be economically illiterate and ruinous. What they need is the ability to control their own healthcare again and to get rid of the third-party system currently ruining their market. The crony relationship between insurance companies and the government is the reason prices have risen well above what consumers can actually afford to pay, and it must stop. 

The Left’s healthcare policies have failed drastically. According to a 2023 Commonwealth Fund survey, 51% of people find it difficult or very difficult to afford their healthcare costs, even with insurance. Premiums have more than doubled since Obamacare was enacted, and 90% of all healthcare dollars are controlled by the government and insurance companies. So all in all, we’re paying tons of money for diminishing services over which we have little control. 

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We’ve tried the government intervening in the healthcare market over and over again. It’s past time we go back to what actually works and insert some capitalism in the system. 

What does that look like in practice? Things such as the ACCESS Act, which could expand HSA access to five million people, allowing them to keep their dollars pretax and use them on healthcare services they choose. It looks like direct primary care initiatives that cut out insurance and get back to doctor-patient relationships. It looks like certificate of need repeal, enabling providers to expand their practices without government approval. If we want to reduce the costs of healthcare, medical debt cancellation is not the answer; empowering patients is.

Hannah Cox (@HannahDCox) is the president and co-founder of BASEDPolitics and a fellow for the White Coat Waste Project.