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Wednesday, January 8, 2025

How Removing Medical Debts from Credit Reports Could Affect Health Care and Lending Practices

 The Biden Administration has issued a new rule that bans all medical bills from consumer credit reports, marking the culmination of years of policy efforts. While the rule stands to benefit some consumers, policymakers should be attentive to responses by lenders and health care providers that could undercut policy goals.

The new rule, announced by the Consumer Financial Protection Bureau, is motivated by the concern that medical bills may not always reflect creditworthiness. Instead, they argue these debts may stem from billing errors or the unpredictable nature of health care expenses, unfairly penalizing consumers.

While accurate to some degree, it is also undoubtedly true that a large share of these debts are legitimate unpaid bills—a conclusion that is consistent with reports showing around half of cost sharing goes unpaid by commercially insured patients. Moreover, the typical medical collection on credit reports is around $300, which can be incurred outside of unexpected, catastrophic events many policymakers appear to have in mind.  

Given these realities, policymakers should be aware of potential reactions by health care providers and lenders to the new policy.

By design, removing medical bills from credit reports lowers the consequences of unpaid bills to consumers, which could reduce the already low rate at which patients pay health care bills. To this point, a recent randomized control trial found medical debt forgiveness led to a modest decrease in payment of medical bills.

In response, health care providers are likely to seek more upfront payment. The fraction of consumer cost sharing collected ahead of care by hospitals has recently increased to 23 percent. I anticipate this will increase moving forward. While this could improve price transparency in health care markets, it also may reduce access for those who currently do not pay medical bills.

Policymakers have also noted the sharp rise in medical credit cards—credit products offered by health care providers at the point of service. These cards allow providers to collect payment immediately while the card issuer takes the responsibility for securing payment from the patient. Between 2013 to 2023, the number of cardholders for just one notable medical credit card grew from 4.4 million to 11.7 million. The new rule is likely to amplify this trend, partly offsetting the intended benefit to consumer finances.

Policymakers should consider potential reactions by lenders as well. Even if medical collections are less predictive of future repayment risk than other derogatory marks, lenders may still consider them valuable signals. If so, removing them from credit reports obscures a perceived source of risk but does not eliminate it.

In response, lenders could proxy for unobserved risk by placing higher weights on non-medical collections or other delinquencies, raising the cost of borrowing for consumers with those flags on their credit reports. It is unclear whether this would be preferable to the status quo. Alternatively, they could increase borrowing costs across all consumers or adjust lending behavior in settings where unobserved risk is deemed significant.

It’s easy to understand why policymakers are keen to alleviate the effects of medical debts on consumer credit profiles, but they should be mindful of likely responses by market actors that may undercut the potential benefits of this new policy.

Benedic Ippolito is a senior fellow in economic policy studies at the American Enterprise Institute. His research focuses on a variety of topics within health economics, including the pharmaceutical market, Medicare Advantage, provider pricing, and the role of health care costs in the personal finances of Americans.

https://www.aei.org/economics/how-removing-medical-debts-from-credit-reports-could-affect-health-care-and-lending-practices/

We need a surgeon general cancer warning on pot

The fact that U.S. Surgeon General Vivek Murthy has no legal authority to mandate cancer warnings on alcoholic beverage labels did not prevent him, as Dry January began, to propose just such a caveat. The evidence on the health hazards of alcohol may be mixed — the Harvard School of Public Health says “the evidence is more nuanced than the headlines suggest” — but as a medical advisor to the nation, Murthy is right to use his best judgment and bully pulpit.

But he has been disappointingly silent on a looming public health threat on which a strong statement might make a real difference: the spreading legalization of recreational marijuana and the absence of standardized warnings for a drug whose effects on mental health, particularly, are becoming increasingly clear.

The federal government currently has no regulatory role when it comes to cannabis; that’s up to the states, 24 of which have chosen legalization. But if Murthy chooses to suggest a warning for beer and booze, there’s no reason he shouldn’t do so for pot.

There are, in contrast, a great many reasons he should. Medical research has identified a variety of ill effects, especially from the potent pot edibles. These include Cannabis Hyperemesis Syndrome (persistent and uncontrollable vomiting); marijuana use disorder (aka addiction) and even a link to the onset of schizophrenia in young adults.

As an under-publicized caveat from the Centers for Disease Control puts it: “cannabis use directly affects brain function — specifically the parts of the brain responsible for memory, learning, attention, decision making, coordination, emotions, and reaction time.” It’s the kind of language that might well be on a warning label. It’s no surprise, in other words, that auto accidents caused by those “driving while impaired” have increased in states, including Washington and Oregon, where pot has been legalized longest. 

It’s a situation that cries out for guidance from “the nation’s doctor” — notwithstanding the fact that the surgeon general’s official role is limited by the fact that cannabis is still technically illegal under federal law. States have taken it upon themselves to change that designation — often, as in New York, emphasizing potential tax revenue and new pot farms more than public health.

Across the country, pot warnings that states do require vary dramatically. In New York, that warning is limited to “smoking or vaping is hazardous to health”, and “keep out of reach of children and pets.” California requires a warning akin to what the surgeon general proposes for alcohol: “this product can expose you to marijuana smoke, which is known to cause cancer, birth defects and other reproductive harm”.

The emphasis by state governments has not been on making pot use safe but, at the same time, discouraging it — or even waiting until all the evidence is in and we can follow the science prior to legalizing. Instead, states have rushed toward legalization.

As Jake Nelson, director of traffic safety advocacy at the American Automobile Association has put it, “We’re painting the plane as we fly it when it comes to cannabis legalization, Public health and safety has been more of an afterthought”. One troubling illustration: Gov. Hochul has proposed changing the state’s current pot tax rules to eliminate a higher rate on more potent products. Her “weight-based” substitute could lead to higher sales to the stronger stuff. 

As a doctor, Murthy surely knows that the benefits of so-called “medical marijuana”, have never been certified by the FDA, normally charged with designating drugs as safe and effective. As with alcoholic beverages, Murthy would be speaking truth to power: the emerging “big pot” industry is already valued at $43 billion. But the fact that states continue to consider whether or not to legalize recreational cannabis, as well as the inconsistent warning labels across the country, makes this the right time for federal guidance. 

A strong statement from the surgeon general would be a welcome counterweight to the broad social trend in which government countenances—and even cheerleads—what amounts to unhealthy, indeed libertine behavior — from drug use to sports gambling — in its quest for tax revenue.

A Hochul press release says she “celebrates stronger than ever cannabis industry surpassing $1 billion in retail sales.” Why is this something to celebrate, unless tax revenue is a greater priority than public health? Would she celebrate if New Yorkers smoked more tobacco or drank more whiskey?

As we rush headlong and heedlessly into pot legalization, the surgeon general has added the risks of alcohol to his office’s longstanding warnings about tobacco use. Cannabis should get the same attention. 

Howard Husock is a senior fellow at the American Enterprise Institute.

https://www.nydailynews.com/2025/01/07/we-need-a-surgeon-general-cancer-warning-on-pot/

Vanguard Group boosts Talen Energy stake to 10.4% as AI demand grows

 U.S. asset management firm Vanguard Group increased its stake in independent power producer Talen Energy Corp to 10.4%, according to a filing on Wednesday.

As Big Tech pours in billions of dollars into AI technology, the demand for electricity to feed power-hungry data centers has also grown. The main beneficiaries of this demand are utilities such as Talen Energy.

Vanguard, Talen Energy's second-largest shareholder, revealed it purchased over 4 million shares of the utility's common stock. As of October, the asset manager owned about 9.9% of its outstanding shares.

Shares of Talen Energy rose over threefold in 2024. They were marginally higher in extended trading on Wednesday.

https://www.marketscreener.com/quote/stock/TALEN-ENERGY-CORPORATION-155304469/news/Vanguard-Group-boosts-Talen-Energy-stake-to-10-4-as-AI-demand-grows-48710333/

UnitedHealth and Amedisys End Sales of Medical Centers to VitalCaring

 UnitedHealth Group and Amedisys have terminated their deal to sell medical centers to VitalCaring Group.

The deal, disclosed in June, was meant to offload some of the companies' assets as they explored a merger.

Health insurer United Health and home health company Amedisys were, at that time, in talks for a $3.3 billion merger. In November, the Justice Department filed an antitrust lawsuit to block the merger.

UnitedHealth delivered a notice on Jan. 3 terminating the purchase agreement with VCG Luna, a subsidiary of the home health company VitalCaring Group. On Wednesday, the companies entered into an agreement allowing for the mutual release of all claims against each other relating to the purchase agreement.

https://www.marketscreener.com/quote/stock/AMEDISYS-INC-8342/news/UnitedHealth-and-Amedisys-End-Sales-of-Medical-Centers-to-VitalCaring-48710319/

Hershey seeking CFTC approval to buy more ICE cocoa than allowed, says report

 Chocolate maker Hershey Co has requested permission from the Commodity Futures Trading Commission (CFTC) to buy an amount of cocoa from the stocks of ICE exchange that is much larger than the maximum allowed, a report said on Wednesday.

According to a report from Bloomberg News, Hershey wants to receive as much as 90,000 metric tons of cocoa from ICE certified stocks using futures contracts, which would equal 9,000 contracts. The current position limit set by CFTC is 4,900 contracts.

Hershey did not confirm or deny having made the request. The company said that it is "well covered" for its cocoa needs for 2025 in response to a Reuters request for comment. Hershey shares were falling 2.6% on late trading on Wednesday.

The CFTC, which is the top U.S. regulator for futures trading, declined to comment.

The Bloomberg report said lawyer Joshua Sterling from law firm Milbank LLP was working for Hershey regarding the request to the CFTC. Sterling, a former CFTC official, declined to comment.

A U.S. cocoa broker said that a potential clearance by the CFTC for that amount of buying would empty ICE certified cocoa stocks, considering both the volumes in ICE New York and the amount stored in London.

ICE New York stocks are currently at around 61,000 tons, while London stocks are close to 21,000 tons.

"It would take certs to zero and more than likely further dry out liquidity (in the futures market)," said the broker, adding that the potential move would be negative for other market participants.

A second broker, working for a New York firm, does not expect the trade to go ahead.

"I don't think the CFTC will grant them - or anyone - a 9,000 lots exemption," he said.


https://finance.yahoo.com/news/hershey-seeking-cftc-approval-buy-204144814.html

Shareholders urge UnitedHealth to analyze impact of healthcare denials

 UnitedHealth Group shareholders on Wednesday said they requested the company prepare a report on the costs and public health impact related to its "practices that limit or delay access to healthcare."

If the proposal makes it to a vote at the company's annual meeting it would raise a charged topic after a senior executive was gunned down in Manhattan last month.

A spokesperson for UnitedHealth said the company will respond to shareholder proposals for its 2025 proxy statement once it files the document that serves as an agenda for its annual meeting, which has not yet been scheduled. In recent years, the company has issued its proxy in April ahead of a June annual meeting.

Those who filed the resolution include religious groups led by the Sisters of the Holy Names of Jesus and Mary of Quebec, and Trillium Asset Management.

The group proposed an analysis of how prior authorization, or approval required by an insurer before a patient can receive medical care, and denials of medical services lead patients to forgo treatment.

"The pattern of delays and denials of necessary medical care by UnitedHealth and other insurance companies harms more than just the patient themselves," Wendell Potter, president of the Center for Health & Democracy and a former Cigna executive, said in a statement sent in support of the resolution by the Interfaith Center on Corporate Responsibility.

UnitedHealth runs the country's largest health insurer, UnitedHealthcare, as well as pharmacy benefit manager Optum and medical practices.

The killing of UnitedHealthcare CEO Brian Thompson in December galvanized criticism of U.S. health insurers, with swarms of patients describing delayed or denied care and accusing companies of using deceptive practices.

Luigi Mangione, 26, who was accused of killing Thompson, pleaded not guilty in a New York court in December after receiving thousands of dollars in public donations shortly after his arrest.

In a December statement, UnitedHealth said it approves and pays for an average of 90% of medical claims submitted.

"Highly inaccurate and grossly misleading information has been circulated about our company's treatment of insurance claims," UnitedHealth said.

UnitedHealth CEO Andrew Witty in a message to employees described Thompson as "one of the good guys," adding the company would continue to service the most vulnerable Americans.

https://www.marketscreener.com/quote/stock/UNITEDHEALTH-GROUP-INC-14750/news/Shareholders-urge-UnitedHealth-to-analyze-impact-of-healthcare-denials-48710249/

Biden Confirms He's Considering Preemptive Pardons

 President Joe Biden in a Jan. 5 interview confirmed that he is considering whether to issue preemptive pardons.

White House officials have said that Biden plans to issue additional pardons and commutations before his term ends.

Preemptive pardons would differ from those Biden has already issued and those issued by other presidents in their final days in office. They would protect people from prosecution for charges that have not yet been brought, reports Zachary Stieber at The Epoch Times.

“Some of your supporters have encouraged you to issue preemptive pardons to people like Liz Cheney and Anthony Fauci ... will you do that?” USA TODAY’s Susan Page asked Biden during the interview.

The individuals suggested have drawn criticism from President-elect Donald Trump, who is set to take office again on Jan. 20.

Biden referenced a meeting with Trump at the White House in November 2024.

“I tried to make it clear that there was no need, and it was counterintuitive for his interest to go back and try to settle scores,” Biden said, recounting the conversation they had.

Trump did not respond directly to that advice, according to the president.

“He didn’t. But he didn’t say, ‘No, I’m going to...’ You know. He didn’t reinforce it. He just basically listened,” Biden said.

“So you haven’t decided yet. You’re still assessing this issue?” Page asked.

“No, I haven’t,” Biden responded. “A little bit of it depends on who he puts in what positions,” Biden said.

The Trump transition team did not respond to a request for comment. Inquiries sent to the employers of Cheney and Fauci were not returned.

Biden in late 2024 pardoned his son, Hunter Biden, whom a jury convicted of federal gun charges and who pleaded guilty to intentionally failing to pay taxes.

Biden later pardoned another 39 people and commuted the sentences of some 1,500 others, including 37 death row prisoners.

One individual floated as a possible preemptive pardon candidate is Hillary Clinton, the former secretary of state.

Clinton, who mishandled confidential emails and whose campaign funded opposition research against Trump, was included in a list compiled by Kash Patel, Trump’s nominee for FBI director.

The list, Patel has said, are participants in the so-called deep state.

Clinton’s husband, former President Bill Clinton, has said that he does not think Biden should preemptively pardon his wife.

“I hope he won’t do that,” he said during a recent television appearance on Dec. 11.

A Clinton Foundation spokesperson did not return a request for comment.

Biden this month awarded Cheney, who was mentioned during the interview, a Presidential Citizens Medal for her work as vice chair of a House panel that investigated the Jan. 6, 2021, breach of the U.S. Capitol. Biden said Cheney and other former officials who received the medal in the ceremony had “dedicated their careers to serving our democracy” and “served in difficult times with honor, decency and ensure our democracy delivers.”

https://www.zerohedge.com/political/biden-confirms-hes-considering-preemptive-pardons