For families struggling with crushing medical debt, help can come in the form of a bright yellow letter.
RIP Medical Debt is a charity that collects donations, buys debt collections and eliminates medical debt for families in poverty. According to its website, it has bought and paid off $715 million in medical debt for about 240,000 Americans.
In the last year, it worked with 56 campaigns with local media and just over 70 faith-based groups to erase medical debt.
City Church pastor David Norris said he found out about this charity through friends who had done the same thing in other communities. He said this has been done in Howard and Hamilton counties as well.
He said medical debt is the leading cause for bankruptcy in America.
“We’re excited about being able to bless families,” Norris said.
He said when people are financially insolvent, which means they are not able to pay the debts they owe, the medical companies aren’t going to get their money anyway, so he wants to help with that burden. He said paying off the medical debt is a juggling act for families.
The charity chooses families who need it the most, but the choice is confidential until the debt is bought and the RIP Medical Debt letters are sent out to their homes.
Daniel Lempert, RIP Medical Debt communications director, said there are three qualifications for debt to be forgiven: being financially insolvent, being two times below the poverty level and the family’s medical debt is 5% or more of their annual income.
In order to work with the campaign, a group needs to raise $15,000 for the charity. They then will locate the medical debt in the area to see which debt bundles they can buy. They work with groups like local campaigners, churches, citizens or school groups.
Anyone can donate to RIP Medical Debt from its website, and all of the proceeds go directly to eliminating the debt. Lempert said because the medical debt costs only pennies on the dollar, one dollar relieves $100 of medical debt for the families.
“The community gets to benefit from this relief, and the campaigners get to make their statement about the state of healthcare,” Lempert said.
The organization buys from different medical debt holders who work with collection agencies within places like hospitals, clinics or ambulance groups.
They purchase the debt that is the least likely to be paid off, often coming from people with chronic illnesses or people below the poverty level.
Lempert said the process of buying and forgiving the medical debt takes an average of six weeks, depending on when the organization buys the debt.
Phil Schuman, IU office of financial literacy director, offered some suggestions to keep in mind when having a pricey trip to the doctor.
He said that if the patient makes the doctors aware they have outstanding medical debt, they are able to try to negotiate the bills to be a lower cost.
“The worst thing they can say is no,” Schuman said.