How ordinary citizens are wiping out millions of dollars in medical debt for others — and how you can, too

For many people who feel crushed under the weight of their medical bills, trips to the mailbox can be anxiety-inducing. A reminder of that you’re in a hole that feels impossible to get out of. A reminder that someone is still after you for money that you don’t have.

In the coming weeks, opening up the mailbox for some people might yield a welcome surprise instead: a yellow envelope with the words “RIP Medical Debt.”

At first, it might look like a scam, perhaps a scheme that might ultimately leave the recipient worse off than they started. But when they open the letter, they’ll learn that the words are, in fact, real. Their medical debt has been forgiven — thanks to someone, somewhere who cared.

A church wiped out $46 million in medical debt

That’s the message that Crossroads Church, based in Cincinnati, wanted to send. Crossroads Church recently eliminated more than $46 million in medical debt for about 45,000 people in Ohio, Kentucky, Indiana, Tennessee and other parts of the country.

“It just seemed like a good thing to do,” Brian Tome, senior pastor at Crossroads Church, told CNN.

The megachurch called on its congregation of about 50,000 people to give to the cause if they had any extra money to spare. And the churchgoers delivered.

“That’s really when churches are at their best: When they notice something that needs to be done, and they have the ability to do it and they then do it,” Tome said.

For Rebecca Alcorn, one of the campaign’s recipients, the letter came at the perfect time.

She and her husband had been working on their credit over the last six months in hopes of buying a home. After paying off some of their other debts, Alcorn had an outstanding medical bill that she had been paying down since 2003. A few weeks ago, she got a letter saying that the bill had been taken care of.

“It really just gave this amazing boost to our life,” she told CNN.

Erasing debt has become a popular way to give back

In the past few years, crowdfunding past-due medical bills has become an increasingly popular way for individuals, charities, religious groups and other organizations to give back to communities.

Many campaigns started after someone saw an article about others who raised money to wipe out medical debt. As more and more people read about similar efforts, some decide to start their own campaigns, causing a domino effect of good deeds.

The campaign started by Crossroads Church is just one of several recent examples.

Erin Potts, a New Orleans resident and an independent consultant who works on social change, started a crowdfunded campaign to wipe out the medical debt of New Orleans’ poorest residents last September.

After reading about two women in New York who erased $1.5 million in past-due medical bills for hundreds of strangers, Potts started wondering what the debt burden was in her own community.

Turns out, some of the most vulnerable people in the city owed $1.9 million of medical debt — and forgiving it all would cost $19,000. Given the weight it would lift off of people’s shoulders, the amount didn’t seem like all that much. So Potts got to work, with a team of others behind her.

“Everybody knows that New Orleans has suffered from things like Katrina and the BP Oil Spill, and as I said in that article, bad calls against the Saints,” Potts told CNN, in reference to a January story from NOLA.com. “There’s a lot going against New Orleans sometimes, and this felt like we can do something that helps so many people in our community in such an important way.”

Potts and her team set up an online donation page. They held a bake sale. They put on a “cookies and cocktails” fundraiser.

By the end of December, about four months after the campaign started, they had exceeded their fundraising goal of $19,000 — and made it possible for some of their fellow citizens to breathe a sigh of relief.

This is how it works

So how exactly do these individuals and organizations go about eliminating all that medical debt? By partnering with a non-profit organization called RIP Medical Debt.

It works like this.

RIP Medical Debt collects funds from donors. Then it works with third-party credit data providers and looks through bundled debt portfolios to locate the accounts of people who meet its criteria for relief.

The organization says it seeks to relieve medical debt for those most in need, meaning people who:

• Earn less than two times the federal poverty level
• Have debt that is 5% or more of their annual income
• Face insolvency, meaning their debts are greater than their assets

Many of those portfolios have passed through several collection agencies already, and debt buyers know that it could take them months or years to collect on them. So RIP Medical Debt negotiates with them to buy the portfolios at a steep discount, saying it averages a penny on the dollar.

In other words, wiping out $100 of medical debt would cost about $1.

Once RIP Medical Debt takes on the debt, it’s forgiven. People get a letter telling them their debt is gone, and just like that, they’re free.

People looking to donate to the cause can give directly to an existing campaign, or they can start a campaign in their own community by getting in touch with RIP Medical Debt. Campaign organizers will determine how much debt is available for purchase in a particular area and discuss a reasonable crowdfunding goal.

The nonprofit was started by debt collectors

Behind RIP Medical Debt are two former debt collectors.

Craig Antico and his co-founder Jerry Ashton worked for years in the collections business, though it wasn’t a job they particularly liked.

Once they found out that another group that worked on abolishing medical debt was shutting down, they left their jobs and launched their own organization in 2014.

“Jerry and I just looked at each other and said, ‘We can’t let this not happen anymore,'” Antico told CNN.

It might sound odd that people who spent years collecting on unpaid medical bills would suddenly switch gears to wiping it all away. But the systems they’re working with are largely the same — it’s the mission that has changed.

As Antico likes to say, he’s now a “predatory giver.”

“As a collector, you don’t think about forgiving the debt. You collect the debt,” Antico said. “I never thought about all the hardship of the people who couldn’t pay. I just thought, ‘Hey, all I’m trying to do is find the people who can pay.’ Now I’m trying to find the people who need help.”

Since RIP Medical Debt began, it has eliminated about $1.5 billion in medical debt for more than 700,000 people, according to Antico.

Medical debt is huge burden on Americans

Medical debt is a widespread problem in the US.

One in five working-age Americans have trouble paying their medical bills, according to a 2016 Kaiser Family Foundation/New York Times survey. Nearly one in five credit reports in the US show unpaid medical debt, while more than of all debts on Americans’ credit reports are from medical expenses, according to a 2014 report from the Consumer Financial Protection Bureau.

An estimated 27.5 million people in the US did not have health insurance at all in 2018, according to the latest data from the Census Bureau.

Even for people who do have health insurance, costs and deductibles have been growing faster than their incomes.

Some face expensive, unexpected medical bills due to emergencies that require ambulances or hospital stays. In situations like those, it’s often difficult, or nearly impossible, to ensure whether a healthcare provider is within a person’s insurance network.

As medical bills rack up, debt can affect other areas of life.

Medical debt is stressful. It can have a damaging effect on credit, making it difficult to buy or rent a home. It’s a common factor behind bankruptcy. It can even drive people to forgo care for fear of being unable to afford costs.

“Medical debt isn’t like someone who just ran up their credit card because they bought too many clothes or something like that,” Tome said. “This is a real life difficulty that you really didn’t bring on yourself. Your body just broke down.”

Medical debt is something most can relate to

For activist Mariame Kaba, the issue of medical debt is personal.

Kaba is the director and founder of Project NIA, an advocacy organization dedicated to ending youth incarceration.

A few years before the Affordable Care Act passed, she said she was denied health insurance. She ended up getting sick and became hospitalized due to diabetes-related issues. And she ended up with a huge stack of medical bills.

Kaba said she was fortunate to be able to pay her medical debt off over several years. But she knows that not everyone is as lucky, and that the constant stream of letters pouring into people’s mailboxes can take a toll.

So she started a campaign in November to pay off the unpaid medical bills for people in New York state and Chicago, both places she had ties to. She put out a call for donations to her vast online network, which includes 149,000 Twitter followers. The goal was to raise $50,000 to wipe out $5 million in medical debt.

Within just a few days, Kaba had reached that goal. So she kept going.

She reached out to RIP Medical Debt to see what other communities could use the help. Among those communities was Flint, Michigan, which had $10 million worth of medical debt eligible for purchase.

Kaba added another $50,000 on to her fundraising goal to eliminate $5 million of debt for Flint residents. But her campaign exceeded that too, raising a total of $151,000.

That meant that after she had paid debts in New York state, Chicago and Flint, she still had about $19,000 left over. Now she’s putting that money toward eliminating $1.9 million of debt in San Antonio, Texas.

The amount of money she raised over a short period of time is a testament to how personal the issue is for people, Kaba said.

“We all have to go to the doctor at some point in our lives. We all have family or friends or people in our community who have to get care,” she told CNN. “This is universal.”

These campaigns provide immediate relief

Critics might argue that the very notion of having to crowdfund unpaid medical bills is a sign of a broken healthcare system, and activists like Kaba and Potts don’t disagree.

But they both said they felt compelled to help people who are currently being crushed under the weight of their bills.

“People are drowning now,” Kaba told CNN. “So we have to do what we can for folks while we’re fighting in a larger way for larger policy shifts and change.”

Potts agreed.

“Medical debt is a disease that we have cures for and we need to get past the political and enact some of those cures,” Potts said. “But in the meantime, it felt like doing something at a local level to help people who might be suffering felt like something we could do easily.”

In other words, curing the disease of medical debt will take time. But while Americans wait, they can take comfort in the fact that there are people out there who want to help them feel better.