Charity To Erase $278 Million Of Medical Debt, In Reminder That US Health Coverage F*cked
Video screenshot, RIP Medical Debt

In a first of its kind agreement, a national charity that buys up medical debt and then makes it go away forever will purchase medical debt directly from a hospital chain instead of on the secondary market, which will get the debt relief to people who need it a lot faster. The Wall Street Journal reports the charity, RIP Medical Debt, will buy up and then retire $278 million worth of patient debt from Ballad Health, a "nonprofit" medical chain that operates in Tennessee and Virginia. However, the Journal also notes that many of the 82,000 low-income patients "shouldn't have been billed at all under the hospitals' financial-aid policies," but couldn't have their medical services covered because they didn't complete financial aid applications.

In civilized countries, everyone just has medical coverage without having to beg, but that's because the rest of the developed world is socialist, we hear.

Some of the debts that RIP Medical Debt will be erasing are up to 10 years old, so that should be a help.

"They still owe that money," said Allison Sesso, RIP Medical Debt's executive director. "It's a weight on them." As many as one in five residents in some ZIP Codes have Ballad debt that will be relieved, she said.

The Journal notes that the specifics of the deal weren't disclosed, like what percentage of the debt amount RIP Medical Debt will be paying the hospital chain. Currently, the charity buys debt on the secondary market for pennies on the dollar, so we'd assume the Ballad deal is comparable, or even, one hopes, something that would make RIP Medical Debt donors' dollars go farther. The charity hopes to make more direct deals with hospitals, "to provide debt relief more quickly."

As the article points out, there's a serious disconnect between reality and policies that are supposed to help people who can't afford healthcare get the services they need. Nonprofit hospitals' financial aid programs receive "federal, state and local tax breaks in exchange for giving back to their communities." But in reality, low-income patients can have a hard time actually using the programs — starting with whether patients even know help is available. Prepare to feel a little stabby.

"Often you'll see, 'You might be eligible for financial assistance' in tiny print, but it's pretty hard to find," said Elisabeth Benjamin, vice president of health initiatives at the Community Service Society of New York. "It's like playing 'Where's Waldo.'"

Maryland recently added new restrictions on hospital debt collection, after a state report said hospitals wiped out less than half of their charges to patients who were eligible for free care under state law in 2018.

Washington state's attorney general sued hospitals over patients' access to financial aid. Under a 2019 consent decree, nonprofit hospitals refunded about $1.6 million to patients.

Somehow we doubt this is saving loads of money nationally over a single-payer system that regulates healthcare costs, where people would just show up at the hospital, show their national healthcare card, and not have to be hounded by debt collectors. (But then what would the debt collection agencies do?)

Unfortunately, nonprofit hospitals are allowed a lot of leeway when it comes to letting patients know financial help is available. Maybe they'll help patients through the paperwork maze, or maybe they'll have a statement in fine print on their website and on intake paperwork and leave the rest up to patients and their families.

The article also notes that Ballad has increased the income limit for qualifying for free or discounted care, and has instituted practices to make sure that people who do qualify can complete their applications.

Ballad first asks patients to apply for financial aid; it bills those without completed applications. New screening is applied before Ballad sends unpaid bills to collection agencies.

That will reduce the type of lingering debt that Ballad agreed to sell to RIP Medical Debt, [Ballad CEO Alan] Levine said. For others, the agreement with RIP Medical Debt will erase prior bills. "We're wiping the slate clean," he said.

That's very nice for what it is, and it's certainly better than setting loose the collection agency hounds.


[WSJ / Image: Screenshot from RIP Medical Debt video]

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Doktor Zoom

Doktor Zoom's real name is Marty Kelley, and he lives in the wilds of Boise, Idaho. He is not a medical doctor, but does have a real PhD in Rhetoric. You should definitely donate some money to this little mommyblog where he has finally found acceptance and cat pictures. He is on maternity leave until 2033. Here is his Twitter, also. His quest to avoid prolixity is not going so great.


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