commit: 9028ba53863889db5d2fa0ab5fe8af5d157cd360
parent 9073fe3ef88ce8878187ac028ffaf8d2d16c44c0
Author: Matt Korostoff <MKorostoff@gmail.com>
Date: Sun, 4 Apr 2021 12:01:16 -0400
Add discussion on total value of medical debt
Diffstat:
2 files changed, 31 insertions(+), 5 deletions(-)
diff --git a/docs/VALUE_OF_MEDICAL_DEBT.md b/docs/VALUE_OF_MEDICAL_DEBT.md
@@ -0,0 +1,25 @@
+### What is the total amount of medical debt held by all Americans combined
+
+*Published April 4, 2021*
+
+We do not know the exact amount of medical debt held by all Americans, but we can make an estimate based on the data we do have. The best source of data on medical debt in America is the [2020 Commonwealth Survey](https://www.commonwealthfund.org/publications/issue-briefs/2020/aug/looming-crisis-health-coverage-2020-biennial) which found that 23% percent of adults had some medical debt they were repaying over time.
+
+There are around [213 million adults](https://www.census.gov/library/stories/2020/06/working-age-population-not-keeping-pace-with-growth-in-older-americans.html) and therefore around 46 million adults with medical debt. These numbers are very approximate, but they are close enough for a rough estimate.
+
+Of the 46 million adults with any medical debt, we do not know the average balance. But we *do* know the breakdown of balance ranges, again from the commonwealth survey:
+
+
+| Debt Range | Number of adults in this group | Maximum possible debt in this group |
+|----------------|--------------------------------|------------------------------------------|
+| under $2,000 | 19,780,000 | $39,560,000,000.00 |
+| $2,000-$4,000 | 9,660,000 | $38,640,000,000.00 |
+| $4,000-$8,000 | 7,820,000 | $62,560,000,000.00 |
+| $8,000-$10,000 | 1,840,000 | $18,400,000,000.00 |
+| over $10,000 | 5,520,000 | $165,600,000,000.00 (assuming $30k each) |
+| | | **Total medical debt in America: $324,760,000,000.00** |
+
+To arrive at this number we make the conservative assumption that every person in any debt range carries the maximum amount of debt in that range. So if someone is in the 4-8 thousand range, they are assumed to have $8,000 in debt. This gives us the upper bound, which is the thing we really need to know to determine the cost of a debt repayment program. We can run this same calculation to calculate the lower bound (about $120 billion) but that number is not useful to us here.
+
+The hardest part of making this estimate is the roughly 5.5 million Americans in the "more than $10K" row, because this row has no theoretical maximum. Here I've made the conservative assumption that *everyone* in that range has a medical debt load of $30K, which brings the total medical debt load of all Americans to $324 billion. The total number swings wildly depending on what you assume for this row. If you assume the average debt load in this row is $11K, then the total for all Americans is about $220 billion. If you assume the average is $100K, then the total is around $700 billion.
+
+So even making some preposterous assumptions that inflate the debt load beyond all reason, it remains well, well within the means of the super wealthy to extinguish the full amount. Again, there's a lot of inexactitude in these numbers, but for a fuller discussion of this issue, see [numbers that don't matter](https://github.com/MKorostoff/1-pixel-wealth/issues/40#issuecomment-648932718).
diff --git a/index.html b/index.html
@@ -338,7 +338,7 @@
<div class="infobox text-infobox infobox-close">
<div class="title">
- <p>Based on the <a href="https://www.washingtonpost.com/world/eu-coronavirus-vaccines-cheaper-than-united-states/2020/12/18/06677e34-4139-11eb-b58b-1623f6267960_story.html">cost of vaccines</a> and the <a href="https://www.who.int/docs/default-source/coronaviruse/act-accelerator/covax/costs-of-covid-19-vaccine-delivery-in-92amc_08.02.21.pdf" target="_blank">cost of delivery</a>, it would take around <a href="https://github.com/MKorostoff/1-pixel-wealth/blob/master/docs/COST_OF_VACCINATION.md" target="_blank">$200 billion</a> to vaccinate every person on earth, about 6% of the wealth currently controlled by 400 Americans. After paying for this vaccination program, they would still be $40 billion richer than they were before the pandemic.</p>
+ <p>Based on the <a href="https://www.washingtonpost.com/world/eu-coronavirus-vaccines-cheaper-than-united-states/2020/12/18/06677e34-4139-11eb-b58b-1623f6267960_story.html">cost of vaccines</a> and the <a href="https://www.who.int/docs/default-source/coronaviruse/act-accelerator/covax/costs-of-covid-19-vaccine-delivery-in-92amc_08.02.21.pdf" target="_blank">cost of delivery</a>, it would take around <a href="https://github.com/MKorostoff/1-pixel-wealth/blob/master/docs/COST_OF_VACCINATION.md" target="_blank">$200 billion</a> to vaccinate every person on earth, which is about 6% of the wealth currently controlled by 400 Americans. After paying for this vaccination program, these individuals would still be $40 billion richer than they were before the pandemic.</p>
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@@ -429,13 +429,14 @@
<div class="infobox text-infobox infobox-close">
<div class="title">
- <p>Americans have about <a href="https://www.pbs.org/newshour/health/millennials-rack-up-the-most-medical-debt-and-more-frequently" target="_blank">$81 billion</a> in medical debt that is sufficiently past due as to appear on their credit report. These are generally small debts, with a median value of <a href="https://files.consumerfinance.gov/f/201412_cfpb_reports_consumer-credit-medical-and-non-medical-collections.pdf" target="_blank">$207 dollars</a> per person. These debts hinder the credit of over 50 million Americans, and do long term damage to their housing, employment, and borrowing options. The cost of repaying this debt dollar-for-dollar would be around 2.5% of the wealth controlled by 400 Americans.</p>
+ <p>Americans have about <a href="https://www.pbs.org/newshour/health/millennials-rack-up-the-most-medical-debt-and-more-frequently" target="_blank">$81 billion</a> in medical debt that is sufficiently past due as to appear on their credit report. These are generally small debts, with a median value of <a href="https://files.consumerfinance.gov/f/201412_cfpb_reports_consumer-credit-medical-and-non-medical-collections.pdf" target="_blank">$207 dollars</a> per person.</p>
+ <p> These debts hinder the credit of over 50 million Americans, and do long term damage to their housing, employment, and borrowing options. The cost of repaying this debt dollar-for-dollar would be around 2.5% of the wealth controlled by 400 Americans.</p>
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<div class="infobox text-infobox infobox-close">
<div class="title">
- This situation looks even better once you understand that delinquent debt is typically not paid dollar-for-dollar. In fact, these debts are often bought up for as <a href="https://www.ksl.com/article/46455844/charity-buys-and-erases-past-due-medical-debt" target="_blank">little as 1%</a> of their face value. This would make the total cost of eliminating all delinquent debt around $810 million, not billion. In 2020, the richest 400 Americans accrued this amount roughly every 29 hours.
+ This situation looks even better once you understand that delinquent is often purchased for as <a href="https://www.ksl.com/article/46455844/charity-buys-and-erases-past-due-medical-debt" target="_blank">little as 1%</a> of its face value. This would make the total cost of eliminating all delinquent debt around $810 million. In 2020, the richest 400 Americans accrued this amount roughly every 29 hours.
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@@ -447,7 +448,7 @@
<div class="infobox text-infobox infobox-close">
<div class="title">
- Note that this figure includes only <em>delinquent</em> medical debt, not all medical debt, a figure which is not publicly known, but still likely within the means of the 400 richest Americans to extinguish. While this is a complex subject in need of a holistic policy solution to address the root causes (sky high medical costs and an under-insured population) there is little doubt that the ultra-wealthy could make a massive and immediate difference in the lives of tens of millions of Americans who struggle financially for no reason other than the misfortune of getting sick.
+ Note that this figure includes only <em>delinquent</em> medical debt, not all medical debt. The value of all medical debt in America is not publicly known, but probably in the neighborhood of <a href="https://github.com/MKorostoff/1-pixel-wealth/blob/master/docs/VALUE_OF_MEDICAL_DEBT.md" target="_blank">$300 billion</a>, or 9% of the wealth controlled by 400 Americans.
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@@ -567,7 +568,7 @@
<div class="infobox text-infobox infobox-close">
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- <p>This is a more complex program to estimate than the others considered on this page, because the expense would be continuous, rather than one-time, and the cost is highly variable based on the size of the benefit provided. Still, this wealth grows each year, and using the <a href="https://www.manning-napier.com/insights/blogs/insights-for-non-profits/endowments-and-foundations-a-closer-look-at-spending-rules" target="_blank">5% endowment payout rule</a> it should be able to finance a program about 12 times more generous than the one contemplated here <u>forever</u> without shrinking by one single dollar.</p>
+ <p>This is a more complex program to estimate than the others considered on this page, because the expense would be continuous, rather than one-time, and the cost is highly variable based on the size of the benefit provided. Still, using the <a href="https://www.manning-napier.com/insights/blogs/insights-for-non-profits/endowments-and-foundations-a-closer-look-at-spending-rules" target="_blank">5% endowment payout rule</a> the super wealthy should be able to finance a family leave program about 12 times more generous than the one contemplated here <u>forever</u> and still get richer into perpetuity, even accounting for inflation.</p>
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