RIP: Rest in Peace, Medical Debt

It would be a waste of time to detail all of the issues with the US healthcare system, chief of which is the cost of medical coverage and, in spite of coverage, the way ordinary people can quickly rack up medical debt that takes away a lifetime of saving. Countless people have wondered why we can’t provide basic medical care for people, like much of the world does. It would be an even greater waste of time to attempt an explanation for that. The answer is, we can but we don’t.

Back in 2014, two former debt collection execs, who know more about the unfortunate side of debt than anybody, decided to do something about it. They, Jerry Ashton and Craig Antico started a charity, RIP Medical Debt, that purchases portfolios of income-qualifying medical debt from debt-collectors and healthcare providors (think of the secondary mortgage market, that purchases mortages), and then relieves the debt. The charity converts every dollar contributed into $100 of debt relief. As of June 2022, the charity has forgiven debts for over 2,800,000 individuals, totaling over $5 billion.

 In 2022, Cook County (which includes Chicago) became the first local government to partner with RIP. Normally, debt collectors buy unpaid bills and then try to collect the money owed. RIP identifies unpaid hospital bills owed by people making up to four times the federal poverty level, then buys that debt on secondary markets or directly from hospitals at a small fraction of the original value. Instead of trying to collect, RIP forgives it — so it simply disappears for the patients.

It’s not a magic trick or a hoax. RIP raises funds donated by individuals, faith-based organizations, foundations, corporations, and others. These donations are then used to buy large bundles of medical debt and then relieve that debt, with no tax consequences. In Cook County’s case, they were also given ARPA (American Rescue Plan Act) money, that Cook County had been given for Covid-19.

Other counties took note of Cook County’s success. One by one, they joined: Akron, Cleveland, Toledo, New Orleans, Wayne County, Mich., and Washington, D.C. As of last week, New York City came on board. New York, of course, is the Big Kahunna of Medical Debt. More than 740,000 New Yorkers currently have medical debt on their credit reports, according to a study by the Urban Institute. And, as with most issues, those most severely impacted are low income and minority.

Life in the Boomer Lane would, of course, prefer that the US follows the 72 countries (whose wealth is much less than ours) to provide health care for their citizens. But, considering that (along with gun control) we haven’t figured this out yet, she thanks Ashton and Antico for solving at least one part of the health care problem. She also thinks the acronym for their company is perfect: RIP. Resting in peace is how the citizens of counties who work with RIP can feel. And kudos to all of the county officials who have promoted this. You rock.