Good Samaritan nonprofit bought $6 billion in medical debt, says it costs $1 to clear every $10
A debt collector turned philanthropist has bought $6.7 billion worth of medical debt in secondary markets — where hospitals sell debt for pennies on the dollar. But instead of profiting from collecting that debt, the nonprofit relieved 3.6 million people of the burden of their hospital bills.
A 2020 University of Minneapolis study examined medical debt and its racial distribution. Researchers found that examining debt in relation to wealth provided insight into structural racism – the policies and practices that produce racial disparities, Brooking reported.
In Minnesota, for example, black people make up 7% of the population, but account for 25% of all covid-19 infections in the summer of 2020. There is a causal relationship between wealth and quality of life, including health, according to the study.
“We present evidence that by reducing the amount of medical debt held by all households, we are disproportionately helping black people,” wrote Brookings colleague Andre M. Perry, along with co-authors Joia Crear -Perry, Carl Romer and Nana Adjeiwaa- Male.
Former debt collectors Craig Antico and Jerry Ashton made careers of pursuing patients who couldn’t pay their bills. Ashton had a change of heart after meeting with Occupy Wall Street activists in 2011 who talked to him about how to help ease Americans’ debt burden, NPR reported.
After helping Occupy Wall Street activists buy debt for a few years, Antico and Ashton launched RIP Medical Debt in 2014 and began raising money from donors to buy debt in the secondary markets.
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“As a bill collector collecting millions of dollars in medical bills over my career, now suddenly I’m reformed: I’m a predatory donor,” Ashton said in a freethink videoa new media journalism site.
To date, RIP has purchased $6.7 billion in unpaid debt, like any other collection company, but instead of profiting from it, it has sent notices to 3.6 million people stating that their unpaid debt had been relieved.
The group says retiring $100 in debt costs an average of $1.
RIP makes these payments randomly based on hospital debt available for purchase and expands the pool of people eligible for relief to people earning up to four times the federal poverty level, versus twice the poverty level. .
Inflation and job losses are putting pressure on more families, Sesso said.
RIP has seen an increase in recent donations, including $50 million from MacKenzie Scott. New regulations mean the company can buy loans directly from hospitals instead of just on the secondary market, expanding its access to debt, NPR reported.
RIP’s expansion is nothing to celebrate, Sesso said. This means that millions of people are victims of an overly expensive American health care and insurance system. More than half of American adults say they have gone into debt in the past five years due to medical or dental bills, according to a KFF survey. A quarter of people with health care debt owe more than $5,000 and one in five say they don’t expect to ever pay it back.
Photo by Piron Guillaume on Unsplash, https://unsplash.com/@gpiron?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText