Nonprofits partner with donation expected to wipe out $100 million in medical debt
HOUSTON - Nearly 70,000 people, including thousands of Texans, are expected to have $110 million in medical debt wiped out. This is thanks to two nonprofit healthcare groups, who are donating money to alleviate their debts.
PREVIOUS: Report finds more people facing medical debt during pandemic
The Journal of the American Medical Association reports one in five households owes an average of $4,600 in medical debt, affecting low-income households and families of color the most.
One resident, Suzie Headrich, for example, says an outstanding medical bill kept her up at night.
"You worry about that stuff. You go to bed worrying about it, thinking about it, and it’s just not fun," said Headrich. "I was in a dispute with it, and I just kept fighting it and fighting it, and then they sent me to the collectors."
Headrich's debt was paid off by a non-profit called RIP Medical Debt, which has used donations to wipe out more than $8 billion in medical debt for more than 5 million people.
Now SCAN, a not-for-profit healthcare group that offers Medicare Advantage plans, says it has partnered with the nonprofit CareOregon. Together they are giving a $345,000 grant to RIP.
SEE ALSO: Mitchell Syndrome patients and families hope for new treatments after raising $25,000
Buying up debts for a fraction of the amounts owed, SCAN says the money will pay off $110 million in bills for nearly 70,000 people in Texas, Arizona, California, Nevada, and Oregon, the states that SCAN serves.
"We’ve identified thousands of people in the states I mentioned that have medical debt they won’t be able to pay. And this debt is sold on the debt markets for pennies on the dollar. So for people who owed $10,000, the debt is now worth $10, $30, $40, $50 dollars," explained Dr. Sachin Jain, CEO of SCAN Group.
Jain says they're paying it because medical debt can damage both someone's credit and health.
"We know one of the top reasons that people forgo medical care or delay medical care is fear of medical debt and the high cost that people incur in the course of their care," Jain said.
People with debt cannot apply for the relief. RIP Medical Debt says that it buys bundles of debt for households earning less than four times the federal poverty level, or whose debts are 5% or more than their annual income, then sends a surprise letter to people like Headrich.
"They were just explaining how they do this for people and I just think it’s amazing. And I was just one of the lucky ones," said Headrich.
SIMILAR STORY: Houston man sells birria tacos to help pay parents' medical bills
If you have medical debt and don't receive a letter, experts say you can take steps to manage and reduce the debt.
More than 80% of medical bills have errors, so go over the bill and your insurance company's EOB, or Explanation of Benefits. Refute any errors with the medical provider.
Ask if you qualify for hospital charity care or an income-based repayment plan.
If you're uninsured, offer to pay what Medicaid or BlueCross would pay for the same services.You can also get a medical bill advocate who will work with the provider to reduce the bill. You can find an advocate through the Medical Billing Advocates of America.
You can also apply for a medical credit card, a credit card with a 0% APR, or a personal loan to pay the debt over time.
If the bill is in collections, you can offer to settle it for a smaller amount. The recent No Surprises Act offers some relief. It removed medical debts under $500 from being reported on credit reports.