Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Blogs
    • AI
    • Deals
    • Layoff Tracker
    • HIMSS 2023
  • Opinion
    • Breaking Bias
    • Commentaries
    • Letters
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • 40 Under 40
    • Best Places to Work in Healthcare
    • Healthcare Marketing Impact Awards
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women Leaders
    • Digital Health Transformation Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Looking Ahead to 2024
    • - AI and Digital Health
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Sponsored Video Series - One on One
    • Sponsored Video Series - Checking In with Dan Peres
  • Data & Insights
    • Data & Insights Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Finance
December 22, 2022 09:57 AM

How nonprofits help millions tackle their medical debt

Associated Press
  • Tweet
  • Share
  • Share
  • Email
  • More
    GettyImages-654573744.jpg
    Getty

    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, a national nonprofit, 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 beyond Scott. Individual donors, corporations, and grantmakers provided $17.3 million last year, about 8% more than its previous best fundraising year.

    Not a Modern Healthcare subscriber? Sign up today.

    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.

    Also, the Annie E. Casey Foundation has made grants to groups addressing medical debt such as the Tennessee Justice Center over the past five years. It contributed about $1.7 million to organizations dealing with debt in 2019. At least $356,200 of that was directed to medical debt.

    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.

    Allison Sesso, executive director of RIP Medical Debt, adds that some of the increase in funding is because donors want to see immediate help for those with debt.

    "There's a lot of frustration with our elected officials in terms of them moving and solving issues, and we give an opportunity for people to have relief right now," Sesso says.

    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.

    RIP Medical Debt used the initial grant from Scott to bolster cybersecurity to protect the health and financial data it collects and improve software that combs through hospital data to identify groups of people eligible for debt relief. It has also used the funding to pay local organizations to help RIP Medical Debt connect with new hospitals to build new partnerships and purchase their debt.

    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.

    But Sesso says the systemic solutions that would prevent debt aren't coming soon enough to negate the nonprofit's debt relief work.

    Meanwhile, Dollar For, which started in 2012, has helped relieve more than $20 million of debt. It does so by helping people access charity care, which nonprofit hospitals are required to provide to low-income patients. In some cases, charity care pays all of a patient's expenses; in others, it covers a portion. Many eligible patients aren't aware they can access charity care, and nonprofit hospitals have been criticized for seeking payments from low income people who qualify for financial assistance.

    An increase in individual donors and grants since 2021 brought the nonprofit's budget to more than $1 million in 2022. That increase allowed Walker, the organization's sole employee, to bring on six additional staff members.

    For the Draper Richards Kaplan Foundation, Dollar For has a promising approach to give immediate help to people facing medical debt. While debt forgiveness and advocacy are important, the foundation's CEO Jim Bildner and managing director Oliver Rothschild say that those approaches have drawbacks. The former comes after people have suffered from medical debt, and the latter can take years to result in change.

    "The organizations we see making the greatest difference in the lives of others are those that have identified existing legislation that should be helping folks in real time, and in this case, with their medical debt," Bildner says.

    While groups combating medical debt have seen an influx of funding, most national philanthropies haven't put an emphasis on the issue, says June Glover, a senior program officer at the Robert Wood Johnson Foundation.

    Download Modern Healthcare’s app to stay informed when industry news breaks.

    "This issue of medical debt will start to come to the forefront again as more states broaden coverage and more Americans are covered, because that's like the upstream intervention," she says.

    In addition, across the South, the Annie E. Casey Foundation leads the Southern Partnership to Reduce Debt initiative, which funds organizations that reduce different types of debt. One of its grantees, the Tennessee Justice Center, helped eliminate $420,488 in medical debt for eight people in 2021. The center also trains healthcare providers and other nonprofits as they work to increase the number of people enrolled in Medicaid.

    Other local nonprofits are helping reduce the consequences of medical debt by pressing for policy changes. Economic Action Maryland, formerly known as the Maryland Consumer Rights Coalition, also advocated for several new state laws in the past two years.

    The Maryland nonprofit is also raising money to replenish its Medical Debt Freedom Fund, which pays off up to $1,000 in medical debt for people in the state. Since 2020, the fund has distributed about $15,000.

    But even if it raises more to distribute, that won't help enough people, says Marceline White, the nonprofit's executive director. However, she says, "if you pass laws, you're able to help hundreds of thousands of people across the state."

    Related Articles
    Philanthropy growing in importance for nonprofit hospitals
    Opinion: Healthcare leaders must harness the power of philanthropy
    Insured patients become top reason for bad debt at providers
    HHS to factor medical debt practices into grant decisions
    Feds report $88B in medical debt on credit reports, vow crackdown on abusive practices
    RIP Medical Debt to buy and eliminate $278 million of Ballad Health patient debt
    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    merger money puzzle
    Fairview not renewing University of Minnesota contract
    urgent care sign
    CommonSpirit plans ambulatory expansion despite financial losses
    Most Popular
    1
    How the No Surprises Act changed strategy at staffing companies
    2
    As hospital expenses rise, charity care spending falls
    3
    Health insurers are still denying claims despite breaking state laws
    4
    What highly recommended hospitals have in common
    5
    Marketing limits could shake up Medicare Advantage market
    Sponsored Content
    Daily Finance Newsletter: Sign up to receive daily news and data that has a direct impact on the business and financing of healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Help Center
    • Advertise with Us
    • Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Blogs
      • AI
      • Deals
      • Layoff Tracker
      • HIMSS 2023
    • Opinion
      • Breaking Bias
      • Commentaries
      • Letters
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • 40 Under 40
        • Best Places to Work in Healthcare
        • Healthcare Marketing Impact Awards
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women Leaders
      • Conferences
        • Digital Health Transformation Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Looking Ahead to 2024
        • - AI and Digital Health
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Sponsored Video Series - One on One
      • Sponsored Video Series - Checking In with Dan Peres
    • Data & Insights
      • Data & Insights Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing