RIP Medical Debt?

I got a letter in the mail today telling me that some of our medical debt had been canceled, through the offices of a group called RIP Medical Debt. The debt was $64.25, arising from an ER visit Becca made in 2015. The debt belonged to Matt, specifically, as he was the guarantor.

I vaguely remember the bills from that ER visit. We were making a lot of ER visits in those days, but that one happened while we were out of town, at the Medical Center of SE Texas in Port Arthur. I remember getting bills from them that didn’t match anything we were getting from our insurance company. I tried for a little while to figure out what the issue was, but eventually I gave up and just let it go. In my defense, I had (I have) a chronically ill child to worry about.

Last fall, I read that our church had “generously and with compassion” given $29,000 to RIP Medical Debt, joining their cause to settle medical debts for pennies on the dollar. I thought the generosity was misguided. Did Jesus pay a ransom to the money changers at the Temple? Was that the lesson we were supposed to get from that story?

I have no idea whether our debt cancellation arose from our church’s medical debt purchase. If so, I believe it was coincidental. As far as I know, they did not ask to target relief to anyone in particular.

In any case, the debt had no impact on our lives. It was more than seven years old, so it had fallen off of credit reports. It wasn’t much money, in any case. It certainly didn’t weigh on me–I’ve got bigger things to worry about than some corporation getting its billing straight. According to my calculations, we didn’t even owe the money.

The letter we received yesterday acknowledged that “almost 30% of people report being contacted about bills they don’t owe.” So 100% of the money spent on our debt was a waste, because the money wasn’t owed. Worse, this money did nothing to improve the hospital’s billing practices–the next people who go there will likely encounter the same problems we did.

In a similar case, a medical debt charity wrote a huge check to cover the debt of patients who never owed the debt in the first place. [WSJ--paywall] The patients were low-income, and should have qualified for free care in that hospital system. Again, the billing was the problem, not the debt. The article describes how some hospitals are thriving by abusive billing practices, and by ignoring rules about transparency in pricing.

There is a growing number of charities devoted to medical debt relief, according to Chronicle of Philanthropy. But the money they throw at hospitals doesn’t necessarily produce actual healthcare. Some chronically ill people avoid getting care because their bills are mounting. Medical debt relief for their bills would be helpful to them, but hospitals aren’t willing to settle recent debts for pennies on the dollar.

Some of the charities seem to be doing marketing work in explaining to poor people how to access care. That’s also a more worthy endeavor than paying off hospitals. Focusing on patients instead of hospitals should be the foundation of any medical charity.