RIP Medical Debt Gains Traction; Comes to Capitol Hill

Last week I was invited to attend a reception event on Capitol Hill hosted by RIP Medical Debt (RIP), a nonprofit that buys and forgives medical debt without tax consequence. The event was called “A Call to End Medical Debt.” Co-Founder Jerry Ashton said their initial goal is to abolish $1 billion in medical debt. He reported that since inception, the group has forgiven $750 million. 

RIP works with individual donors, philanthropists and organizations to purchase medical debt for pennies on the dollar to provide financial relief for those burdened by impossible medical bills. Founded in 2014 by two former collections industry executives, Craig Antico & Jerry Ashton, RIP rose to national prominence on an episode of HBO’s “Last Week Tonight” with John Oliver in which RIP facilitated the abolishment of $15M in medical debt.

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You may recall that we’ve written about this organization in the past. Most recently, in November 2018 the group announced a national campaign to forgive $250 million in medical debt across the country during the holiday season. Much of RIP’s recent work has been accomplished through local campaigns led by churches or news organizations to raise funds to forgive debt within the community.

The organization has picked up steam – and supporters – since I last looked. Approximately 45-50 people attended last week’s Capitol Hill event, including congressional staffers, medical industry, AARP, collections industry leaders, veterans, advocates, and media. 

Worth noting is that RIP has a focus, though not exclusive, on medical debt held by veterans. Two of the reception attendees were veterans who shared facts they said many are unaware of. For instance, it is not uncommon for veterans to have medical expenses that are not covered by the Veterans Administration. This causes issues not only for the veterans but for their caretakers who may also be out of work. In fact, one of the speakers said, there is currently $6 billion in unpayable veterans’ medical bills. According to RIP’s website, so far they have forgiven over $50 million in veteran debt.

Ashton said they select debt pools that represent consumers with income at twice the national poverty level or below, or insolvent, or paying at least 5% of household income in debt. At this time they can only forgive the debts of consumers as a group; they are not yet able to handpick individuals. RIP says that because “the forgiveness is a gift from a detached and disinterested third party as an act of generosity, forgiveness does not count as income to the debtor.” No 1099-C is filed with the IRS.

Congressman Joe Morelle (D-NY) opened the session and spoke about his work on surprise medical bills. (insideARM has covered this topic as well; read the latest here.) His staff later tweeted this, with a photo of the Congressman with RIP founders Craig Antico, Jerry Ashton, and Robert Goff:

Oregon Congressman Earl Blumenauer also dropped by, and staffer for congressman Van Taylor (R-TX) was there for the full evening. The idea of abolishing medical debt may be one of the rare issues with bi-partisan support.

You can click here if you’d like to make a tax-deductible donation of any amount to RIP or to learn about starting a local campaign.

You can click here to buy the RIP founders’ latest book, End Medical Debt (royalties go to forgiving debt). The book delves into the most popular proposed solutions to skyrocketing healthcare costs -- repealing and replacing the Affordable Care Act, insurance reform, drug price controls, adding a Medicare Option to the ACA for those over age 50 or 55, and Medicare-for-All (single-payer universal healthcare) -- and concludes with a call for an American Medical Debt Commission that reports to Congress annually about the national medical debt crisis.

insideARM Perspective

There was a lot of skepticism from the ARM industry about this initiative when it emerged. I will say that from what I can see after five years, the intentions are pure, the approach is creative, the group is truly helping people, and they have gotten the attention (and partnership) of some very credible individuals and large organizations. Given that the criteria is to identify those with the greatest need, it seems to me that this initiative could be viewed as complementary to the debt collection industry, which is not served by attempting to collect from those who truly cannot afford to pay.