Imagine if you had an illness or accident that sent you to the hospital, racking up an enormous medical bill. You get out of the hospital, and now you have to choose between buying groceries — or medicine, or school supplies for your child, or repairs on your car — and making payments on that hospital bill. Then imagine what it would feel like if one day that medical debt simply… vanished. More than 6 million U.S. families have had that experience. Each received a letter in the mail from RIP Medical Debt informing them that their debt had been completely wiped out, with no tax penalty.
Every day, 1 in 2 Americans choose between paying medical bills and covering basic needs. This astonishing data point, which is a banner headline on RIP Medical Debt’s website, probably shouldn’t come as a surprise, given the eye-popping cost of healthcare in the U.S. and the fact that health insurance typically covers just a fraction of medical costs. Over 100 million Americans — many who carry health insurance — are awash in medical bills. Those debts aren’t distributed equally: Black people are 50% more likely than white people to have such debt, and Hispanics are 35% more likely.
RIP Medical Debt works to chip away at the problem; to date, it has abolished over $9 billion in medical debt — and counting. The organization just received a shot in the arm from the Jane and Daniel Och Family Foundation. The foundation’s $575,000 gift is expected to wipe out about $264 million of medical debt for 125,611 patients in Miami-Dade County.
The Och Family Foundation was created by billionaire hedge fund manager Daniel Och and his wife Jane. Public health is a primary focus for the foundation, along with medical research, education, Jewish causes, and arts and culture. The foundation’s giving to date has been channeled largely to New York City, where the couple lived for years, and to Florida, which they now call home. The foundation has been a major supporter of the antipoverty Robin Hood Foundation, as IP’s Ade Adeniji reported recently; the Ochs have also given to NewYork-Presbyterian Hospital, including providing funding for a spine care facility (now the Daniel and Jane Och Spine Hospital). Daniel Och has served on the hospital board since 2005.
This support helped prompt the foundation’s recent gift to RIP Medical Debt, according to a representative from the foundation.
“Through the Jane and Daniel Och Family Foundation’s work with the Robin Hood Foundation in New York, they have first-hand seen how unstable financial situations can negatively impact vulnerable communities,” the representative wrote via email. “Dan and Jane’s work with NewYork-Presbyterian and the Och Spine program has also emphasized the importance of ensuring all families have access to quality medical care.”
Predatory giving
RIP Medical Debt was created in 2014 by Jerry Ashton and Craig Antico, who both worked as debt collectors. Ashton got the idea after helping activists purchase debt as part of the Occupy Wall Street protest. He and Antico realized that instead of hounding people to pay their bills, they could free them from debt instead. “As a bill collector collecting millions of dollars in medical-associated bills in my career, now, all of a sudden, I’m reformed: I’m a predatory giver,” Aston said in a Freethink video.
RIP Medical Debt works like this: The organization buys large batches of debt at a deep discount, which is precisely what debt collectors do. But instead of then going after people to pay overdue medical bills, it simply disappears the debt, having paid just pennies on the dollar. As the organization tells donors on its website, “Every $100 you donate relieves $10,000 in medical debt.” RIP Medical Debt relieves debts for households that earn less than four times the federal poverty level or those whose debts are 5% or more of their annual income. There are no tax penalties or other fees for those whose debts are relieved.
RIP Medical Debt got a major boost in 2016 when it teamed up with John Oliver, who used $60,000 to abolish nearly $15 million in medical debt on his show, Last Week Tonight. (In the episode, Oliver is exuberant, giddily boasting about giving away far more than Oprah ever did on her show.)
“It really got people’s attention,” said Allison Sesso, RIP Medical Debt’s president and CEO. “John Oliver put our name on the screen and so many people contacted us that the website broke down. It was in a ‘good-problem-to-have’ category, but it was also a lot.” When IP wrote about the organization in 2019, its goal was to abolish $1 billion in medical debt by 2020 (it hit that goal at the end of 2019, according to Sesso); it is now approaching $10 billion.
Sesso, who previously headed the Human Services Council of New York, joined the organization in 2020, and it has continued to grow. MacKenzie Scott gave $50 million in 2020, and another $30 million in 2022. The Tipping Point Fund on Impact Investing, a donor collaborative, has also provided funding.
Like the Jane and Daniel Och Foundation, whose contribution will relieve medical debt in Miami-Dade County, some RIP Medical Debt supporters focus debt relief efforts on a specific region. In 2021, for example, Fair Fight, the organization Stacey Abrams founded, provided $1.34 million through its affiliated PAC to relieve medical debt in Georgia, Arizona, Louisiana, Mississippi and Alabama. And the Minnesota-based Communicating for Agriculture Scholarship & Education Foundation (CAF) recently partnered with RIP Medical Debt to abolish $3.3 million in medical debt carried by Minnesotans. Other funders include Stefan for Life Foundation, which was created to honor Stefan Adelipour, and philanthropist Ryan “Jume” Jumonville.
Some municipalities are also partnering with the organization, a trend that started when Cook County eliminated close to $80 million in medical debt for families there. Now other municipalities, including Toledo and New Orleans, have been reaching out to RIP Medical Debt do the same. According to Sesso, 16 cities, 12 counties and seven states have expressed interest in collaborating with the organization. And hospitals and health systems in some areas – 97 hospitals to date — partner with RIP Medical Debt to relieve their patients’ debt. Sesso hopes more hospitals will step up. “Call us! We want to talk to every hospital that’s interested in retiring debt,” she told NPR.
The organization also relies on individual donations and crowdfunding campaigns by churches and other groups. “RIP Medical Debt lets everyone be a philanthropist,” Sesso said. “That’s my line, because $1 gets rid of $100 in medical debt, so if you launch a campaign for $10,000, you’re getting rid of a million dollars in medical debt. Some people will do things like participate in a run and they’ll make us the beneficiary — you know, typical ways of doing fundraising like that. It’s quite amazing how many donations we get from crowdsourced grassroots funding.”
A wake up call
When people receive a letter from RIP Medical Debt, some initially assume it’s a scam. Then they do a little research and realize that their medical debt is completely gone. In response, many express their gratitude in messages included on the organization’s website. These messages reflect the enormous stress that medical debt causes families.
“Medical debt has real physical implications, which is why we say that medical debt is a social determinant of health in and of itself,” Stesso said. “The mental health strain increases your blood pressure, and maybe you don’t eat right, and you’re not sleeping well — you’re not doing any of the things doctors tell you to do to take care of yourself because you have this thing hanging over your head. On top of that, people tend to not go back to the doctor because they’re ashamed and they don’t want to get into more debt.”
A report from the Kaiser Family Foundation and NPR reached the same conclusion: “Medical providers say this is one of the most pernicious effects of America’s debt crisis — keeping the sick away from care and piling toxic stress on patients when they are most vulnerable.”
Some of those working in the healthcare system recognize the need for change, as a recent gift to RIP Medical Debt makes clear. In June, SCAN and CareOregon, two health plans, provided funding to abolish $110 million in medical debt. Sachin Jain, SCAN Group and Health Plan’s president and CEO, told the American Journal of Managed Care that the gift was made to help patients — but also to underscore what’s wrong with our healthcare system.
“It’s intended to be a wake-up call to our industry,” Jain said. “We’ve somehow landed in this place where people are actually afraid to access medical care; they forego medical care — necessary medical care — because they’re afraid of that they might get a bill that they can’t pay.”
RIP Medical debt supports policy solutions to reduce medical debt; they advocate for better, more affordable healthcare and against extraordinary collection actions. The organization also works with hospitals and providers to help them make existing financial assistance policies easier for patients to learn about and access.
But wiping out medical debt one patient at a time won’t fix our ailing health care system; that will require fundamental system reform, and RIP Medical Debt is well aware of that reality.
“This is not the forever solution to the problems in our broken healthcare financing system,” Stesso said. “It can’t be, and we are very clear eyed about that. People say, ‘You’re only a Band-Aid to a bigger problem.’ And I’m like, ‘Yeah, but people are bleeding. That Band-Aid probably feels very good to someone who is bleeding.’ And in the process of putting on that Band-Aid, we’re going to keep talking about why so many people are getting cut in the first place.”
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