How to Buy Forgiveness from Medical Debt

The New Yorker Radio Hour

WNYC Studios and The New Yorker

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4.2 • 5.5K Ratings

🗓️ 11 July 2023

⏱️ 15 minutes

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Summary

Nearly one in ten Americans owe significant medical debt, a burden that can become crippling as living costs and interest rates rise. Over the past decade, a nonprofit called RIP Medical Debt has designed a novel approach to chip away at this problem. The organization solicits donations to purchase portfolios of medical debt on the debt market, where the debt trades at steeply discounted prices. Then, instead of attempting to collect on it as a normal buyer would, they forgive the debt. The staff writer Sheelah Kolhatkar reports on one North Carolina church that partnered with RIP Medical Debt as part of its charitable mission. Trinity Moravian Church collected around fifteen thousand dollars in contributions to acquire and forgive over four million dollars of debt in their community. “We have undertaken a number of projects in the past but there’s never been anything quite like this,” the Reverend John Jackman tells Kolhatkar. “For families that we know cannot deal with these things, we’re taking the weight off of them.” Kolhatkar also speaks with Allison Sesso, the C.E.O. of RIP Medical Debt, about the strange economics of debt that make this possible.

Transcript

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0:00.0	This is the New Yorker Radio Hour, a co-production of WNYC Studios and the New Yorker.
0:12.0	This is the New Yorker Radio Hour, I'm David Remnick.
0:15.6	The rise in healthcare costs and the crushing medical debts that follow from that are a
0:20.8	problem that long predates COVID, although the pandemic certainly contributed.
0:26.2	That long predates the recent trend toward inflation, too.
0:29.6	For so many Americans, the stream of late notices and threatening voicemails never quite
0:35.0	ends.
0:36.4	Two former debt collectors got together to try to tackle the problem from a very unexpected
0:41.7	direction.
0:43.2	Staff writer Sheila Callhatcar who covers business and finance for the New Yorker looked
0:47.7	at how one small church in North Carolina erased more than $4 million of other people's
0:53.9	debts.
0:54.9	Here's Sheila.
0:55.9	RIP medical debt was founded in 2014 by two former debt collection executives.
1:03.6	It's based in New York and the organization gathers up contributions and donations and
1:10.0	uses them to buy out bundles of outstanding medical debt and then pays off that debt,
1:19.0	which can have life changing consequences for some of the people who owe money for medical
1:23.0	bills.
1:24.2	In order to try and understand this a little better, I spoke with Reverend John Jackman,
1:28.6	the pastor of Trinity Moravian Church in North Carolina.
1:33.2	Tell me about Trinity Moravian Church and the community where you serve.
1:38.1	Trinity Moravian Church is a little over a hundred years old.
	...

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