Americans are drowning in medical debt, so this nonprofit is buying — and forgiving — it

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• Judy Woodruff:

  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.

• Paul Solman:

  Sixty-one-year-old Gwenlyn Quezada had a near fatal stroke last year.

• Gwenlyn Quezada:

  They had told my son, if I come through, I would be a vegetable.

• Paul Solman:

  The North Carolina resident managed to defy the experts, but not the economics.

• Gwenlyn Quezada:

  Hearing the bill collectors calling you about hospital bills that you know you don't have the money.

• Question:

  How much were your bills?

• Gwenlyn Quezada:

  Over $6,000.

• Paul Solman:

  That's after insurance.

• Reagen Adair:

  You have the doctor. Then you have the labs.

• Paul Solman:

  Texas teacher Reagen Adair owed 10 grand after migraines landed her in the hospital.

• Reagen Adair:

  This has got to be the most embarrassing thing to have to go through.

• Paul Solman:

  And after 13 strokes and two heart attacks, John Foutch simply says:

• John Foutch:

  I don't have the money. I don't have a job. I can't pay it.

• Paul Solman:

  These are a small sampling of the many millions of Americans who collectively owe nearly a trillion dollars worth of medical debt.

• Craig Antico:

  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.

• Paul Solman:

  Craig Antico and Jerry Ashton used to be debt collectors.

  Were you embarrassed to tell people you were a debt collector?

• Jerry Ashton:

  I introduced myself as resolution management.

  (LAUGHTER)

• Craig Antico:

  I would say, I run a collection agency.

• Paul Solman:

  And what was their reaction in general?

• Craig Antico:

  Oh, you're a leg breaker.

• Actor:

  What do you want?

• Actor:

  A hundred and 40 bucks. You got it?

• Actor:

  No.

• Actor:

  Come on! Let's tear it up!

• Paul Solman:

  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.

• 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.

• Craig Antico:

  And then the collection companies try to collect the whole thing.

• Paul Solman:

  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?

• Elton Nielsen:

  Oh, yes. Normandy, all hell broke loose.

• Paul Solman:

  You were in the Philippines, too?

• Elton Nielsen:

  Oh, yes. A lot of dead bodies all through there.

• Paul Solman:

  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?

• Elton Nielsen:

  Oh, yes.

• Paul Solman:

  Really? What do you say to them?

• Elton Nielsen:

  I do the best I can.

• Paul Solman:

  As would most of us. One problem when we don't, embarrassment.

• Elton Nielsen:

  I feel bad.

• Paul Solman:

  Retired M.D. Susan Soboroff.

• 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.

• Paul Solman:

  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.

• Craig Antico:

  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.

• Paul Solman:

  Because it's a stigma, you mean?

• Craig Antico:

  Because it's a stigma. And they're proud.

• Paul Solman:

  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.

• Man:

  Behold the face of new America.

• Paul Solman:

  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?

• Craig Antico:

  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?

• Jerry Ashton:

  I ran up all my credit cards. I borrowed from my own family.

• Craig Antico:

  My wife gave me the silverware and her jewelry to put into hock.

• Jerry Ashton:

  I hocked my guitar that I used to play with as a folk musician.

• Craig Antico:

  I have five boys, and two of them had to stop going to college.

• Paul Solman:

  And then when did it turn around?

• Craig Antico:

  In May of 2016, we got on a nationwide show.

• John Oliver:

  So are you ready to do this?

  (CHEERING AND APPLAUSE)

• Paul Solman:

  That's investigative comedian John Oliver, whose HBO show had actually created a company to buy and forgive uncollected medical debt.

• John Oliver:

  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.

• Paul Solman:

  But needing help to forgive the debt without creating tax liabilities for the debtors, Oliver turned to Ashton and Antico's struggling nonprofit.

• John Oliver:

  They will commence the debt forgiving process. So what do you say? Are you ready to make television history?

  (CHEERING AND APPLAUSE)

• Paul Solman:

  That segment put RIP Medical Debt on the map.

• John Oliver:

  It's done! It is done!

• Paul Solman:

  And how could they buy so much debt for so little? Because it's the least collectible debt out there in the secondary market.

• Jerry Ashton:

  We go to the debt buyers, who now have this residue, uncollected.

• Paul Solman:

  Right.

• Jerry Ashton:

  And we say, you sell us that debt. You're not going to collect it anyway.

• Paul Solman:

  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.

• Jerry Ashton:

  You know what we're doing? We're charity-picking.

  (LAUGHTER)

• Paul Solman:

  Charity-picking.

• Craig Antico:

  That is so great, Jerry.

• Jerry Ashton:

  I'm a visionary.

• Paul Solman:

  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.

• Judith Jones:

  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.

• Paul Solman:

  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.

• Judith Jones:

  So we set up a Web site, CureVetDebt. One dollar relieves $100 of the veteran's debt.

• Paul Solman:

  She sends money to RIP.

• Judith Jones:

  That's wonderful. Thank you.

• Paul Solman:

  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.

• Jerry Ashton:

  "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."

• Paul Solman:

  And how many of these have you gotten?

• Craig Antico:

  We have had a total of over 10,000 people write to us.

• Paul Solman:

  And you can't do anything individually with any of them?

• Craig Antico:

  No, we can't. We can't abolish debts of individuals.

• Paul Solman:

  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.

• Gwenlyn Quezada:

  "You no longer owe the balance on the debt."

• Paul Solman:

  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":

• Jerry Ashton:

  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.

• Paul Solman:

  You mean you wipe out $500 worth of…

• Jerry Ashton:

  It'll wipe out $500 worth of medical debt and educate you as well.

  (LAUGHTER)

• Paul Solman:

  For the "PBS NewsHour," Paul Solman, trying to help educate, from New York.

• Judy Woodruff:

  Remarkable.

  And just this afternoon, RIP Medical Debt announced that it had eliminated $1 billion in medical debt for over 500,000 people.