Nonprofits are helping with medical bills, changing the law

Nikiesha Barnett had knee surgery in 2006 and took unpaid leave as a Georgia hospital coordinator while she was recovering. When Barnett couldn’t keep up with payments for the surgery, she was about $4,500 in debt.

That debt lasted nearly 14 years until one day in 2020, she received a letter from a nonprofit stating the debt had been written off. Medical debt RIPa national nonprofit, bought her debt and forgiven it.

Barrett said when she was in debt, she felt so guilty that she went to the doctor. Now that concern has been wiped clean.

Barnett is one of millions of Americans who have had medical debt paid for by nonprofits and has received growing support from a variety of donors and donors, including MacKenzie Scott. Scott awarded RIP Medical Debt $30 million in November after giving the organization $50 million in 2020.

That support has fueled RIP Medical Debt’s extensive write-off. This nonprofit has written off more than $7 billion in debt since it was founded in 2014 and has helped more than 4 million families.

As nonprofits have expanded their efforts, they are taking a dual approach — paying off debt and pushing for changes to the law to prevent or reduce it, such as by expand eligibility for Medicaid.

According to an analysis by the Kaiser Family Foundation, more than half of adults in the United States have been in debt because of medical or dental bills in the past 5 years. Black and Hispanic adults are disproportionately burdened with medical debt. Southern states also have higher rates of medical debt.

Medical Debt RIP has received support from sources other than Scott. Individual donors, corporations, and donors provided $17.3 million last year, about 8% more than the previous best fundraising year.

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Dollar For, a national nonprofit that helps patients get financial assistance from hospitals, increased its budget from $350,000 last year to more than $1 million this year. A large grant comes from the Draper Richards Kaplan Foundation, which is giving the nonprofit a total of $300,000 over three years.

Nonprofits that help address medical debt at the local and state levels have also received a boost in giving. The Robert Wood Johnson Foundation has awarded $2.4 million to Community Catalyst, a health policy nonprofit that provides support to small groups working with hospitals on their financial policies and advocates support new policies.

Additionally, the Annie E. Casey Foundation has funded medical debt settlement groups like the Tennessee Justice Center for the past five years. It contributed about $1.7 million to debt collectors in 2019. At least $356,200 of which went to medical debt.

More platforms and people are giving for many reasons. Jared Walker, founder of Dollar For, said the COVID-19 pandemic has made more people aware of the urgency of the issue and inspired donors to donate more.

Allison Sesso, chief executive officer of RIP Medical Debt, adds that some of the funding increases are because donors want immediate help for those in debt.

“There is a lot of frustration with our elected officials about how they move around and deal with issues, and we give everyone an opportunity to get some relief now,” said Sesso.

Two former collections executives, Jerry Ashton and Craig Antico, founded RIP Medical Debt in 2014. The organization buys large amounts of low-income people’s medical debts from hospitals and collection agencies. debt at low cost.

RIP Medical Debt used the initial grant from Scott to strengthen cybersecurity to protect the health and financial data it collects, and to improve hospital data review software to identify potential health problems. group of people eligible for debt forgiveness. It has also used the funding to pay local organizations to help RIP Medical Debt connect with new hospitals to build new partnerships and buy their debt.

There are limitations to RIP Medical Debt’s initial approach, as it helps people after they go into debt. Nonprofits are also increasingly supportive of policy change efforts. It recently backed a ballot proposal in Arizona to limit the interest charged on medical debt and debtor actions, which voters passed in November.

But Sesso says the systemic solutions that will stem the debt aren’t soon enough to negate the nonprofit’s work on debt relief.

Meanwhile, Dollar For, which started in 2012, has helped reduce more than $20 million in debt. It does so by helping people access charity care, which nonprofit hospitals are required to provide to low-income patients. In some cases, charity care covers all of the patient’s costs; in others, it covers a part. Many eligible patients do not know that they can charity care accessand nonprofit hospitals have been criticized for seeking payment from low-income people who qualify for financial assistance.

An increase in individual donors and grants since 2021 has brought the nonprofit’s budget to more than $1 million by 2022. That increase allows Walker, the organization’s sole employee position, there are six more employees.

For the Draper Richards Kaplan Foundation, Dollar For has a promising approach to providing immediate help to those facing medical debt. While debt forgiveness and advocacy are important, the foundation’s CEO Jim Bildner and chief executive Oliver Rothschild say those approaches have downsides. The former happens after people go into medical debt, and the latter can take years to lead to change.

“The organizations that we see are making the biggest difference in the lives of others are the ones that have identified existing legislation that will help people in real time and in this case,” says Bildner. is with their medical debt.”

June Glover, a senior program officer for the Robert Wood Johnson Foundation, said that while groups fighting medical debt have received an influx of funding, most national charities haven’t. this problem.

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“This medical debt problem will start to come back to the forefront as more states expand coverage and more Americans get covered, because that’s like an upstream intervention,” she said.

Additionally, across the South, the Annie E. Casey Foundation leads the Southern Partnership for Debt Relief initiative, which funds various debt relief organizations. One of its grantees, the Tennessee Justice Center, helped eliminate $420,488 worth of medical debt for eight people by 2021. The center also trains healthcare providers. and other nonprofits as they work to increase Medicaid enrollment.

Other local nonprofits are helping to reduce the consequences of medical debt by promoting policy change. The Maryland Economic Action, formerly known as the Maryland Consumer Rights Coalition, also supported several new state laws over the past two years.

The Maryland nonprofit is also raising money to supplement the Medical Debt Relief Fund, which will pay up to $1,000 in medical debt for people in the state. As of 2020, the fund has distributed approximately $15,000.

Marceline White, the nonprofit’s chief executive officer, said even if it raised more for distribution, that wouldn’t help enough people. However, she said, “if you pass the law, you could help hundreds of thousands of people across the state.”


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