One in 5 Americans have at least one medical debt in collection on their credit reports, according to the National Consumer Law Center.
“We buy that debt and wipe it out,” Craig Antico, the co-founder of RIP Medical Debt, said.
RIP Medical Debt is a nonprofit that buys medical debt in bulk and wipes it out for people.
“The good thing is, we buy these accounts in bulk. We buy $100 million of debt at one time. When we do that, we can get a very good discount, below 1 percent," Antico said. "So, we’re able to take all these accounts. We’ve abolished over $1.5 billion of debt for over 700,000 people.”
Recently, the organization started the Helping COVID Heroes Fund in order to help front line workers get rid of pre-existing medical debt.
“We now found between $70 and $100 million of debt of those people that we can abolish debt for,” Antico said. “We’re able to do this for nurses, EMS people.”
In the future, he said that will include service workers such as grocery clerks, waiters, and hair stylists.
Here’s how the process works. Say you have a medical bill that’s sent to the collection agency. If it’s left unpaid for a certain amount of time, it could get sent to an attorney, impact your credit score, or, for those who can’t afford to pay the bill, dig them into a deeper financial hole.
“They just can’t pay anymore,” Antico said.
That’s where RIP Medical Debt steps in.
“The hospitals have to take a discount, otherwise they’ll get nothing. That’s why they work with us, because they’d rather get something than nothing,” Antico explained.
More than 1 in three3 Americans struggle to afford the cost of their medical care, according to stats provided by RIP Medical Debt. Nearly 1 in six6 Americans have been contacted by a debt collector over a healthcare bill, according to the National Consumer Law Center.
“There are lots and lots of occasions where individuals have gone bankrupt because of medical costs,” said Mac Clouse, a finance professor at the University of Denver, who has been a finance professor for over 40 years.
“The medical costs have been going up so quickly, and in some cases some people who are covered, often times, you don't see the bill to see what kind of costs there are,” Clouse said.
Clouse says he’s seen a rise in how much people are having to pay for health care.
As Americans face the impact of the COVID-19 pandemic, Clouse said things could become worse.
“What's scary now is people are losing their jobs; they don't know whether they’re going to be losing coverage or not," he said. "People have been furloughed but have been told they still have medical benefits. But if you're just plain unemployed, that's when it becomes scary. Now, if you do get sick and you get put in the hospital, who’s gonna pay for that?”
Antico said there are some ways to avoid medical debt, like letting collectors know the financial position you’re in, understanding your medical coverage if you have it, and just being aware.
RIP Medical Debt takes donations through their website to help those in need. Everyone they help meets the criteria of earning less than two times the federal poverty, being in financial hardship, or facing insolvency.
“This is one of the things you can actually do and know the dollar is going to abolish 100 dollars,” Antico said about donations. “People are one illness or accident from financial ruin in this country and maybe we can help the ones that are being harmed the most.”