The number one driver of bankruptcies in the United States is the country’s dysfunctional health care system. Medical expenses cause 62% of bankruptcies in the U.S., a statistic unfathomable to residents of other first-world countries. Per capita medical cost in the U.S. was $11,172 in 2018. That’s 17.7% of Gross Domestic Product.
According to the Kaiser Family Foundation, 26% of Americans aged eighteen through sixty-four have difficulty with medical bills, more than half of whom have medical insurance. (Medicare kicks in at age sixty-five.)
Hospitals and other medical providers typically sell their unpaid bills to collection agencies after ninety to a hundred-eighty days. Collection agencies pay pennies on the dollar for the right to collect the full amount of unpaid bills.
Enter RIP Medical Debt. Founded in 2014 by two veteran debt collectors, RIP buys debt portfolios from collection agencies and wipes out the indebtedness at no cost to the indebted. So far they have erased more than $4.5 billion of medical bills for more than 2.5 million individuals and families.
RIP Medical Debt recently purchased unpaid medical bills for the first time directly from a health care provider. Ballad Heath, a network of hospitals in Tennessee, Virginia, Kentucky and North Carolina, sold $278 million of unpaid bills to RIP. Terms were not announced, but presumably the deal was more advantageous to RIP Medical Debt than with a collection agency in the middle. More than 80,000 low-income patients will have their outstanding bills, some as old as ten years, wiped out.
RIP Medical Debt is a 501(C)(3) non-profit organization and states that contributions to them are tax deductible. You can make a donation on their web site.