How to Buy Forgiveness from Medical Debt

The Political Scene | The New Yorker

The New Yorker

Politics, Washington, News, Obama, Wnyc, President, Lizza, Barack, Wickenden

4.3 • 3.9K Ratings

🗓️ 31 July 2023

⏱️ 16 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.

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0:49.2	This is the political scene, and I'm David Remnick.
1:06.2	The rise in health care costs and the crushing medical debts that follow from that are a problem that long predates COVID, although the pandemic certainly contributed. It long
1:12.6	predates the recent trend toward inflation, too. For so many Americans, the stream of late notices
1:18.5	and threatening voicemails never quite ends. Two former debt collectors got together to try to
1:25.4	tackle the problem from a very unexpected direction.
1:29.3	Staff writer Sheila Colhatcar, who covers business and finance for the New Yorker,
1:33.6	looked at how one small church in North Carolina erased more than $4 million of other people's debts.
1:41.0	Here's Sheila.
1:42.8	RIP medical debt was founded in 2014 by two former debt collection
1:48.1	executives. It's based in New York, and the organization gathers up contributions and
1:54.9	donations and uses them to buy out bundles of outstanding medical debt and then pays off that debt, which can have
2:05.6	life-changing consequences for some of the people who owe money for medical bills. In order to
2:10.8	try and understand this a little better, I spoke with Reverend John Jackman, the pastor of Trinity
	...

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