RIP Medical Debt has found a working formula to relieve medical debt for millions of people. It still has room to grow.
The New York nonprofit uses donations to buy medical debt in bulk from hospitals and debt collectors for pennies on the dollar. It mostly targets the debt of people with low incomes and then forgives the amounts.
Founded in 2014, the organization says that it has relieved more than $8.5 billion in medical debt so far.
Researchers have estimated that there is well over $100 billion in collections in the U.S.
RIP Medical Debt named Allison Sesso CEO shortly before the pandemic hit in 2020. She wants to continue expanding the amount of debt her organization buys, especially from hospitals. She also wants to draw more attention to a system that keeps generating debt.
The 47-year-old executive spoke recently with The Associated Press. The conversation has been edited for clarity and length.
Q: How does most of the debt you relieve develop? Does it come from a certain type of care?
A: It can be from dental work. It can be from a hospital bill. It is more about how good your coverage is and how expensive the cost is and loopholes within the system than it is from the provider type.
Q: Has anything surprised you about the nature of the debt you relieve?
A: I had this assumption that medical debt was burdening people in large sums. And I’ve come to realize that a lot of the debt is deductible amounts, which means that people are underinsured, not uninsured.
Q: How small are these amounts that wind up in collections?
A: We relieve a lot of debts that are $500 to $5,000.
Q: You have started buying debt from hospitals that they are not trying to collect. Why bother?
A: When the hospital stops collecting, they don’t notify the patients. … So in the patient’s mind, they still owe the debt. Then the patient doesn’t get the care that they need from that hospital. There’s a mental health component to having medical debt that is significant. It creates anxiety and stress.
Q: Why do you relieve debt randomly and not take requests?
A: For efficiency and for lowering our costs. It would require a lot of individuals to look at those applications and sort through them.
Q: Are there new areas of debt collection you want to explore?
A: Our main goal is to get as much debt as possible from more and more hospitals, ideally, and other direct providers. But we also understand that our work is a stopgap. So, we’re increasingly using our ability to turn $1 into $100, on average, of medical debt relief to raise awareness about the issue and advocate for policy changes that fix this problem more fundamentally.