By Erin Drury Boorn, senior philanthropic officer
Many DeKalb County residents are about to get a wonderful surprise in the mail – the elimination of their medical debt. With a $100,000 grant to RIP Medical Debt, an anonymous Community Foundation donor has erased approximately $10 million in medical debt in DeKalb.
Medical debt devastates American families: nearly 40% of American households have outstanding medical debt or problems paying medical bills, and in the last year alone, approximately 75 million people had to choose between medical bills and basics like food, heating, or housing. RIP Medical Debt estimates that in DeKalb County alone, over $70 million in medical debt is owed.
RIP Medical Debt (RIP) is a national nonprofit organization that acquires and then cancels unpaid and unpayable medical debts. The organization and its model for debt abolishment became more widely known after comedian and social commentator John Oliver paid off a large amount of medical debt during a segment on his HBO television show, Last Week Tonight. RIP’s relief is random, based on qualifying debts available, and unfortunately cannot be requested.
RIP uses data analytics to pinpoint the medical debt portfolios of those most in need of relief, including households that are at two times or below the federal poverty level, insolvent or going through hardship. It then purchases these oppressive debts in large, bundled portfolios at significantly reduced rates. On average one dollar donated to RIP relieves $100 of medical debt. Once RIP buys debt, it forgives it – no strings attached. After abolishing a debt, it sends out notices in yellow RIP-branded envelopes to the families and the debt or debts in question are removed from their credit reports.
One of the benefits the Community Foundation offers is anonymity for our donors if they choose. When this donor heard about RIP at their church, they were inspired because the organization was started by two former debt collectors who didn’t feel good about their jobs. The donor sought to do something to ease the economic pain caused by the COVID-19 pandemic, which is disproportionately affecting Black and Latinx communities. For this reason, helping DeKalb County residents (over 54% of which are Black and almost 10% are Latinx) was extremely important to the donor. Additionally, medical debt prior to COVID disproportionately impacted the Black and Latinx community largely due to disparities in income and access to health insurance.
Abolishment of medical debt is an incredible gift with far-reaching consequences for recipients. The gift renews their access to opportunities that will allow them to rebuild financial solvency. With the debt eliminated from their financial records and drain on precious dollars removed from household budgets, families are on a path to stability. It opens possibilities – recipients can move on to secure housing, purchase a car or build savings. It’s a win-win for pennies on the dollar!
