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Collectively, Americans owe nearly a trillion dollars of medical debt, and Congress is trying to figure out a policy response. But in the meantime, economics correspondent Paul Solman reports on an unusual non-profit’s effort to relieve the burden of medical debt for those in need.
And on another health care story, Congress is still trying to work out a compromise on a different pocketbook issue, eliminating surprise medical bills.
The problem can drive many people into deep debt.
Our economics correspondent, Paul Solman, has a report on that debt and a unique effort to help people in need.
It's part of our series Making Sense.
Sixty-one-year-old Gwenlyn Quezada had a near fatal stroke last year.
They had told my son, if I come through, I would be a vegetable.
The North Carolina resident managed to defy the experts, but not the economics.
Hearing the bill collectors calling you about hospital bills that you know you don't have the money.
How much were your bills?
That's after insurance.
You have the doctor. Then you have the labs.
Texas teacher Reagen Adair owed 10 grand after migraines landed her in the hospital.
This has got to be the most embarrassing thing to have to go through.
And after 13 strokes and two heart attacks, John Foutch simply says:
I don't have the money. I don't have a job. I can't pay it.
These are a small sampling of the many millions of Americans who collectively owe nearly a trillion dollars worth of medical debt.
Fifty percent of all collections in this country are medical. Of the 100,000 collectors that we have in this country, 50,000 or more are medical debt collectors.
Craig Antico and Jerry Ashton used to be debt collectors.
Were you embarrassed to tell people you were a debt collector?
I introduced myself as resolution management.
I would say, I run a collection agency.
And what was their reaction in general?
Oh, you're a leg breaker.
What do you want?
A hundred and 40 bucks. You got it?
Come on! Let's tear it up!
Now, it's not as if legally licensed debt collectors bear any resemblance to gangland toughs, but the objective is the same, says Jerry Ashton.
The bill collector is the enforcer for the financial industry. Anybody who lends money out there, they expect to be paid. So, if they can't do it, then they rely on third parties.
And when the third parties fail, then they will consider, such as with hospitals, of selling their debt into the open market, the debt market, for a few cents on the dollar.
And then the collection companies try to collect the whole thing.
Chasing down borrowers in default, regardless of their ability to pay. Consider 94-year old Elton Nielsen, a Navy veteran of World War II.
Were you under fire ever?
Oh, yes. Normandy, all hell broke loose.
You were in the Philippines, too?
Oh, yes. A lot of dead bodies all through there.
Nielsen lives off Social Security, in subsidized housing, is covered by VA benefits and Medicare, but even he has co-pays and deductibles for ambulance trips, E.R. visits, rehab center care after numerous falls.
Do you get phone calls from the collection agency?
Really? What do you say to them?
I do the best I can.
As would most of us. One problem when we don't, embarrassment.
I feel bad.
Retired M.D. Susan Soboroff.
Often, when people owed us money, they didn't show up for appointments. And, of course, there were consequences of that. People with chronic illness had more problems. They didn't get their prescriptions filled. They got sicker.
And what almost no one knows — I certainly didn't — is that most medical bills can be contested. As many as 80 percent have errors. They can be past the statute of limitations. And then there's the charity care exemption.
About 30 percent of the accounts that get placed for collection, they qualified for charity care. If they make less than two times the poverty level, they get it, no questions asked. But people don't take it. Oh, no, that's not for me.
Because it's a stigma, you mean?
Because it's a stigma. And they're proud.
Now, Antico and Ashton knew all this, as debt collectors. But then the crash of '08 hit, and the Occupy Wall Street movement began, right outside their office window.
Behold the face of new America.
Intrigued by the movement's focus on debt, Ashton started attending and blogging about it. Eventually, he persuaded Antico to help him start a nonprofit, RIP Medical Debt, that would raise money to buy up and forgive seriously delinquent medical bills.
It was a slog and a half.
How do you make a living as a debt forgiver?
You have to get donors that are willing to pay your salary. In the first three years, we made hardly anything. And my wife was saying, why are we going into debt to help people get out of debt?
I ran up all my credit cards. I borrowed from my own family.
My wife gave me the silverware and her jewelry to put into hock.
I hocked my guitar that I used to play with as a folk musician.
I have five boys, and two of them had to stop going to college.
And then when did it turn around?
In May of 2016, we got on a nationwide show.
So are you ready to do this?
(CHEERING AND APPLAUSE)
That's investigative comedian John Oliver, whose HBO show had actually created a company to buy and forgive uncollected medical debt.
We were soon offered a portfolio of nearly $15 million of out-of-statute medical debt from Texas, at a cost of less than half-a-cent on the dollar, which is less than 60 grand. So we bought it.
But needing help to forgive the debt without creating tax liabilities for the debtors, Oliver turned to Ashton and Antico's struggling nonprofit.
They will commence the debt forgiving process. So what do you say? Are you ready to make television history?
That segment put RIP Medical Debt on the map.
It's done! It is done!
And how could they buy so much debt for so little? Because it's the least collectible debt out there in the secondary market.
We go to the debt buyers, who now have this residue, uncollected.
And we say, you sell us that debt. You're not going to collect it anyway.
And something, like half-a-cent or a penny on the dollar, RIP's usual cost, is better than nothing.
So you're doing like the opposite of cherry-picking. You're taking the worst cherries.
You know what we're doing? We're charity-picking.
That is so great, Jerry.
I'm a visionary.
Part of the vision, harness local groups to raise money to relieve debt in their communities.
At last month's Veteran Day Parade in Ithaca, New York, Judy Jones was fund-raising for a second round of debt relief. She'd read about RIP Medical Debt last year.
I called the head of the charity and I said, can we do this? And he said, yes, if you raise $12,500. So, we did.
Mostly from friends, wiping out $1.5 million of medical debt in Upstate New York. So, this year, she decided to do it again, targeting veterans' debt.
So we set up a Web site, CureVetDebt. One dollar relieves $100 of the veteran's debt.
She sends money to RIP.
That's wonderful. Thank you.
They buy up a debt portfolio. But though Jones also ministers to local vets like Elton Nielsen, she can't target individuals. Neither can RIP, no matter how desperate the requests.
"I was diagnosed with non-operable pancreatic cancer in April 2018. Our bills have already surpassed $2.4 million. Hospital's already sent me to collections. Please help. Thank you."
And how many of these have you gotten?
We have had a total of over 10,000 people write to us.
And you can't do anything individually with any of them?
No, we can't. We can't abolish debts of individuals.
But the individuals in the portfolios get a letter in a yellow envelope telling them their medical debt has been canceled.
That's how local TV stations, which had raised money from viewers for debt forgiveness, found the folks with whom this story began.
"You no longer owe the balance on the debt."
A final thought.
Our story has been timed to run during the holiday season, a time for giving. So, you yourself can do as Judy Jones has done, or, even simpler and more modestly, say the co-authors of the book "End Medical Debt":
Every time somebody goes to Amazon and buys the book, because the authors gave up our royalties, that is the same thing as donating $500 towards medical debt.
You mean you wipe out $500 worth of…
It'll wipe out $500 worth of medical debt and educate you as well.
For the "PBS NewsHour," Paul Solman, trying to help educate, from New York.
And just this afternoon, RIP Medical Debt announced that it had eliminated $1 billion in medical debt for over 500,000 people.
Watch the Full Episode
Paul Solman has been a business, economics and occasional art correspondent for the PBS NewsHour since 1985.
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