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Want to Give a Gift That Helps? How About Forgiving Medical Debt

A nonprofit helps people in need by purchasing bundles of past-due medical bills and forgiving them.

If you’re looking for a special Christmas gift to mark this holiday season, you could follow in the footsteps of two women in upstate New York, a man who lost his wife to cancer, and a well-known television host.

All of them donated money to RIP Medical Debt, a nonprofit that helps people in need by purchasing bundles of past-due medical bills and forgiving them.

RIP Medical Debt is one of multiple organizations across the country hoping to help people with crushing medical costs. Other organizations allow people to make charitable donations so patients can afford expensive care.

How to cancel medical debt

RIP Medical Debt may be best known from a segment that John Oliver did in 2016 on his HBO show “Last Week Tonight.” During the show, Oliver paid $60,000 to forgive over $14.9 million in medical debt through the organization.

According to its website, the organization has helped donors forgive over $468 million in medical debt. But it says this is just a fraction of the $750 billion in medical debt that Americans owe.

“We’re a drop in the bucket,” admits board director Robert Goff.

The organization focuses on buying the debt of people with low incomes or financial hardships.

Because the organization buys medical debt for pennies on the dollar, “people with a small amount of money can have a big impact in their community,” said Goff.

Two women in upstate New York recently raised $12,500, which translated to $1.5 million of medical debt erased, according to the New York Times.

Goff said one man also donated the proceeds of his wife’s life insurance after she died of cancer. The wife had good health insurance during her treatment, so the man wanted to help people who didn’t.

Uninsured at risk of medical debt

According to The Commonwealth Fund, 41 percent of working-age Americans in 2007 had existing medical debt or difficulty paying their medical bills.

Jack Needleman, chair of the Department of Health Policy and Management at the UCLA Fielding School of Public Health, said certain groups are more at risk of medical debt.

First, the uninsured. According to the Kaiser Family Foundation, 10.2 percent of non-elderly adults were uninsured in 2017.

Needleman said overall this group tends to be younger and healthier, so their medical spending is lower. But a small percentage of the uninsured has high medical expenses that may end up as medical debt.

Also, some things like injuries can affect anyone.

“When people get hit by a ‘lightning bolt’ — whether that is being hit by a bus, being hit by cancer, or just being hit by a bad genetic disposition for a high-expense illness — they are at risk for high debt,” said Needleman.

Even people with high-deductible policies — such as $5,000 to $10,000 — can rack up significant medical debt before their insurance kicks in.

“If you look at statistics on people’s savings,” said Needleman, “an awful lot of households do not have those kinds of assets to draw down on when they confront a high-cost illness.”

In some cases, loopholes have left parents with huge bills for the birth of their children, even if they have health insurance.

Many Americans turn to charity for help

RIP Medical Debt’s help happens far downstream from gaps in people’s health insurance coverage. Goff described this as like “cleaning up after the elephants in a parade.”

Many people with medical expenses, though, seek help much earlier.

According to a 2016 poll conducted by the New York Times and the Kaiser Family Foundation, 11 percent of Americans have turned to a charity for help paying medical bills.

According to MPR News, one-third of GoFundMe’s campaigns are for medical expenses.

Oregon-based nonprofit Dollar for Portland offers another option for people facing overwhelming medical expenses. The name of the organization highlights its unique approach to helping.

“When I started this, I thought if we could get thousands of people helping one family, it would mean more than one big donor coming in and helping,” said Dollar for Portland CEO and founder Jared Walker.

Each month, 100 percent of donations to the charity go to help a family nominated by a local hospital or organization.

In addition to covering medical bills, Dollar for Portland can help out with other expenses during a medical crisis — such as paying for gasoline or grocery cards or helping families with transportation when their wheelchair-accessible van breaks down.

People in Oregon and Washington can also submit their information on the organization’s website to find out if they qualify for charity care from a hospital, something many people may not realize is available.

“The problem that we see all the time is that families declare bankruptcy on medical bills that legally they wouldn’t have had to pay,” said Walker.

Dollar for Portland and RIP Medical Group both help people struggling to pay for medical care they couldn’t do without — such as families whose child has cancer or someone who was hit by a car.

But Needleman said there’s another group of people who can’t afford medical care — “people not getting valuable and needed care because they’re afraid to go in and confront the bills.”

These people may end up putting off or declining medical care because they can’t afford it.

“That can lead to consequences down the road, in terms of more serious illness,” said Needleman.

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