Easing medical debt’s burden
Nonprofits getting support from wide variety of donors to help millions of Americans
Nikiesha Barnett had knee surgery in 2006 and took unpaid leave from her job as a Georgia hospital coordinator while she was recovering. When Barnett wasn’t able to keep up with the payments for the surgery, she ended up owing about $4,500.
That debt lingered for almost 14 years until one day in 2020, she received a letter from a nonprofit telling her the debt had been relieved: RIP Medical Debt had bought her debt and forgiven it.
Barrett says when she was in debt, she felt too guilty about what she owed to go to the doctor. Now that concern has been wiped away.
Barnett is one of the millions of Americans who’ve had medical debt paid by nonprofits that receive increased support from a wide variety of grantmakers and donors, including MacKenzie Scott. Scott gave RIP Medical Debt $30 million in November after awarding the organization $50 million in 2020.
That support has fueled RIP Medical Debt’s far-reaching debt relief. The nonprofit has cleared more than $7 billion of debt since it was founded in 2014 and helped more than 4 million families.
As nonprofits have expanded their efforts, they’re taking a dual approach — paying off debt and pushing for legislative change to prevent or alleviate that debt, such as by expanding Medicaid eligibility.
More than half of adults in the United States have gone into debt because of medical or dental bills in the past five years, according to an analysis by the Kaiser Family Foundation. Black and Hispanic adults are disproportionately burdened by medical debt. States in the South also see higher rates of medical debt.
RIP Medical Debt has gained support from other sources: Individual donors, corporations, and grantmakers provided $17.3 million last year, about 8% more than its previous best fundraising year.
Dollar For, a national nonprofit that helps patients get financial assistance from hospitals, increased its budget from $350,000 last year to more than $1 million this year. One big grant came from Draper Richards Kaplan Foundation, which is giving the nonprofit $300,000 total over three years.
Nonprofits that help with medical debt at the local and state levels also have received a boost in giving. The Robert Wood Johnson Foundation gave $2.4 million to Community Catalyst, a health policy nonprofit that gives aid to small groups that work with hospitals on their financial policies and advocate for new policies.
More foundations and people are giving for various reasons. Jared Walker, founder of Dollar For, says the COVID-19 pandemic helped more people become aware of the urgency of the issue and inspired donors to give more.
Two former debt collection executives, Jerry Ashton and Craig Antico, founded RIP Medical Debt in 2014. The organization buys the medical debt of low-income people in bulk from hospitals and debt collectors at a reduced cost.
There are limitations to RIP Medical Debt’s original approach, as it helps people after they have gone into debt. The nonprofit has increasingly backed efforts to change policy as well. It recently supported a ballot proposal in Arizona to limit interest rates charged for medical debt and actions against debtors, which voters approved in November.