Book authors aim to pay off $1 trillion in medical debt
With donations from people across the nation, three health care industry veterans have been chipping away at abolishing America’s $1 trillion medical debt, and they recently wrote a book that explains the challenges and rewards of this mission.
The co-authors – Craig Antico, Jerry Ashton and Robert Goff – founded the nonprofit RIP Medical Debt to buy medical debt for pennies on the dollar and then forgive it, removing any blemishes on credit histories and giving financial relief to millions of Americans. In a telephone interview with The Sacramento Bee, Ashton said they wrote the book (“End Medical Debt: Curing America’s $1 Trillion Unpayable Healthcare Debt,” Hoku House, 196 pages, $25.95) for people who want to understand why this problem exists and how they can help to end it.
“It’s not like people are going out and buying big screen TV’s or booking vacations in Bermuda,” Ashton said. “Nobody elected to have cancer. Nobody chose to have an accident. Ninety-eight percent of all people are true victims of a horrible situation.”
The three authors are donating their royalties on the book toward ending medical debt. For every book sold, they say, $500 in medical debt is paid off. RIP’s co-founders estimate that Americans owe about $1 trillion in medical debt. The nonprofit has so far paid off a little more than $662 million, according to the counter at www.ripmedicaldebt.org.
If the RIP Medical Debt name sounds familiar, it may be because you responded to a call from The Bee and other McClatchy Co. newspapers to help erase medical debt for veterans. In a 10-part series called “The War Within,” McClatchy reporters chronicled how three Afghanistan veterans were coping with their reintegration into civilian life.
As part of that effort, McClatchy asked readers to consider donating to RIP. Donations from McClatchy, its readers and the McClatchy Foundation were able to pay off more than $5 million in medical debt for veterans nationwide. When the nonprofit pays medical debt for someone, that person gets notified via a letter inside a yellow envelope.
Through the interview with Ashton and reading the book, The Bee discovered a number of things about medical debt. Here are five that might surprise you:
It is virtually impossible to get out of paying a medical debt, even if your doctor agreed to take whatever your insurance company pays, even if a hospital said they wrote off your bill as bad debt, even if a provider changed its billing system and stopped sending you bills, even if you received care a decade or two earlier.
There are really only four ways to erase your medical debt: Pay it. Get it discharged as part of a bankruptcy. Get the provider to issue a credit to you and thus forgive it. Or, legislators can pass a law essentially voiding the contract.
Ashton said he’s often asked, “How can veterans incur medical debt? Don’t they receive free care at hospitals run by the Department of Veterans Affairs?”
“Our system is broken,” he said. “VA hospitals aren’t open for emergencies on weekends. If you’re a veteran and a medical problem hits you on a weekend and you’re taken to an emergency ward … you will owe that bill. The hospitals attempt to collect money out of the VA, but not with a lot of success.”
U.S. military veterans owe $6 billion in debt related to ambulances and emergency care, Ashton said, and the VA is not picking up that tab. He said that means these veterans are being chased down by bill collectors.
Suppose you “get lucky,” and after decades of being harassed by bill collectors, a creditor agrees to forgive your medical debt. You may think you’re finally in the clear, but think again. The U.S. government looks upon your good fortune as ordinary income. Your creditor could very likely send you a 1099-C “Cancellation of Debt Income” with a copy to the Internal Revenue Service, and you will owe taxes on that “income.”
Insurance companies can take as many as seven years to pay a bill from a provider outside your insurance network, Antico wrote in a chapter on personal and general medical debt solutions. Often, people go to friends and family for help in paying off these expenses because nonpayment can affect their credit reports. (Friends and family contribute $55 billion to help pay medical expenses and debt repayment. ) If you pay an out-of-network bill, be sure to file your request for reimbursement with your insurer. Do not rely upon the out-of-network provider to do it for you.
In the book, Antico noted that RIP Medical Debt works directly with companies that buy debt on the secondhand market but also with doctors and hospital leaders who would like to sell or donate accounts to the nonprofit. Many have done so because they are dispensing with accounts that offer little value in exchange for changing someone’s life for the better. RIP also uses the powerful analytics of the TransUnion credit reporting agency to identify accounts that meet hospitals’ charity care requirements and to ensure hospital patients get the peace of knowing their debt is forgiven.
‘‘ NOBODY ELECTED TO HAVE CANCER. NOBODY CHOSE TO HAVE AN ACCIDENT.”
Jerry Ashton, co-author