MANCHESTER, Conn.
Like the rest of the country, Connecticut is full of people who can't afford their hospital bills. These people may have medical insurance with high deductibles or have exhausted their coverage because of chronic ailments. While nobody is going to prison for medical debt, it can impair credit records and hold people back in life, especially people who were poor to begin with.
Hospitals are often ready to sell the least collectible of their patient debts for a tiny fraction of their nominal value. So with its new budget state government is joining a movement to extinguish the medical debts of people who probably will never be able to repay them. The budget include $6.5 million for distribution to nonprofit organizations that buy medical debt from hospitals and then cancel it. Advocates of the appropriation, including Gov. Ned Lamont, think it might eliminate as much as $650 million in medical debt to hospitals in Connecticut.
While this undertaking is well worth a try, journalism about it has been superficial to the point of misleading. For the debt involved here isn't really being eliminated at all, merely transferred. Indeed, in effect the debt already has been transferred back to the hospitals that have been carrying it. It has been built into hospital operating costs and is being recovered either through efficiencies at the hospitals or higher charges to medical insurers and patients who pay for themselves.
Like nearly everything in medicine, medical-debt-elimination programs are mechanisms of cost shifting. Medical insurers negotiate lower rates with hospitals, causing them to reduce costs or shift them to the less insured. The federal government medical-insurance programs, Medicare and Medicaid, pay less than what hospitals consider the full cost of treatment, and so hospitals must economize again or recover the government discounts with higher charges elsewhere.
Hospitals cannot operate at a loss for long, and if government wants them to stay in business, it has to subsidize them directly or indirectly, as by increasing government insurance payments. If government pays, then all taxpayers do, along with countries that buy the federal government's apparently infinite debt.
Medical care isn't ever really free, and medical debt can't simply be written off. Someone always will be paying for the people who don't pay. Such cost shifting is inevitable in any jurisdiction that won't let people die in the street, but it's not a magic wand.
Medical-debt elimination will be a boon to hard-luck cases and the poor, but it won't reduce the cost of medical care. It won't improve medical-insurance coverage. It won't lift anyone out of poverty. It will only recognize that many people remain poor.
While medical-debt elimination will repair some credit records, it won't prevent the same people from getting stuck with medical debt again. It also will make medicine a little more complicated and may even give people the idea that hospital bills are easily evaded if they hold out long enough. It will validate the principle articulated by the French economist Frederic Bastiat, who two centuries ago anticipated the modern world. Government, Bastiat wrote, is the great fiction by which everybody tries to live at the expense of everybody else.
One reason that the Connecticut General Assembly entertains many questionable proposals is the decline in journalism about the legislative process. Questionable proposals would die faster if local news organizations strove to do frequent surveys of legislators about their positions. As local news coverage has weakened, that kind of political journalism has disappeared.
Instead every other bit of graffiti and vandalism in Connecticut now is causing hysteria, being treated as the rebirth of the Ku Klux Klan or Nazi Party and a tidal wave of "hate" sweeping the state. Such was the case with the recent defacement of the Hartford street mural that celebrates the Black Lives Matter movement.
Perhaps glad to be distracted from murder investigations, Hartford police quickly found the culprit -- a local vagrant with a long criminal record and many pending charges. Since he's not Donald Trump, reporters didn't ask why he wasn't already in jail.
Chris Powell has written about Connecticut government and politics for many years. (CPowell@cox.net)
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