South Carolina donors and a national nonprofit are giving early presents to more than 12,700 families across the state: that medical bill that has been hanging over their heads just disappeared.
Donors and nonprofits in the state contributed more than $57,000 toward a campaign that the national group RIP Medical Debt used to purchase medical debt in bulk for pennies on the dollar, wiping out $11.9 million in doctor or hospital bills. Letters will be going out this week and the next to let the recipients know their slate has been wiped clean.
“The recipients don’t actually know yet,” said Tom Ervin of Greenville, one of the organizers of the campaign.
Tom Ervin of Greenville helped organize a campaign that wiped out nearly $12 million in medical debt for more than 12,700 families in South Carolina. File
With Christmas and Hannukah around the corner, “and in the spirit of the holidays in general, the timing couldn’t be better,” said Scott Crawford of Seneca, who also helped organize it.
RIP Medical Debt is a New York-based nonprofit founded in 2014 that uses donations from individuals, foundations and nonprofits to make bulk purchases of medical debt from providers and from other sources like collection agencies at a tiny fraction of the cost, and has cleared nearly $7.4 billion so far. The South Carolina campaign began in early 2020, said Ervin, a former judge and board member for a hospital in Anderson.
For Crawford, it was a personal mission after he was diagnosed with bladder cancer and, even though he has good health insurance, faced a mounting number of bills during the successful treatment.
“They were stacking up,” he said. Crawford mentioned the campaign for medical debt relief to his mother, who told him, “That was me when you were growing up.” Crawford’s father had died of Hodgkin’s lymphoma and the family was stuck with medical bills it couldn’t pay for five years, he said. No matter what his mother did, “she just couldn’t climb out of it,” Crawford said, until eventually the debt was written off.
It is still that way today for many American families, including a large percentage of people in South Carolina. There were $88 billion in unpaid health expenses reported to credit agencies in June 2021, and medical bills make up the largest percentage of accounts referred to collection agencies, or 58 percent of those burdensome debts, according to the Consumer Financial Protection Bureau. That can affect credit scores and make it harder for people to find a home or even get a job, the agency said.
While 11 percent of people under age 65 were uninsured in 2020, another 26 percent were underinsured, meaning they had insurance but did not seek care because of the cost, according to the Peterson-Kaiser Family Foundation Health System Tracker. A major cause of that is high deductibles, said Allison Sesso, CEO of RIP Medical Debt.
“The bigger problem I see is people are insured but they have deductibles they can’t afford,” she said. “A lot of people avoid care because of that or delay it until they are really sick.”
That includes many people who get their health insurance through their employer. In 2021, 50 percent were enrolled in a high deductible health plan, with a deductible of $1,000 or more, including 67 percent of those in businesses that employed less than 200 people, according to the Peterson-KFF tracker. That adds to medical debt, Sesso said.
“Some of the medical debt is the deductible,” she said.
South Carolina bears an unusually high burden of medical debt, with 22.87 percent of people in the state carrying unpaid health care bills, second only to West Virginia, according to an analysis of Credit Bureau data by NiceRx. And it doesn’t have to be a large amount — the average amount of debt in South Carolina abolished in the recent campaign was $935.82. But even more moderate amounts can be big obstacles for many families, Sesso said.
“Increasingly, people don’t have $500 for an emergency expense,” she said. “People are living paycheck to paycheck. And in a climate of inflation, that only creates more pressure on that situation.”
RIP Medical Debt focuses on those lower-income families and those who have a higher percentage of debt compared to income, which is what also attracted Crawford to the cause.
“They’re able to identify people who need it the most,” he said. “These are folks who have challenges to begin with,” before adding medical debt on top of it.
Ervin and his wife, Kathryn, had previously funded a campaign with the nonprofit in 2019 that abolished $1.5 million in bills for about 1,000 people in the Upstate. This time around, a majority of the debt relief occurred in the Upstate again, but that was largely a coincidence, Ervin said. RIP Medical Debt buys the debt it has access to, which could have been a large provider in the area but could also be out-state health systems or collection agencies, Sesso said.
“We buy our debt from a variety of sources so it isn’t one provider,” she said. “It is a variety that is cobbled together.”
The relief families feel should be all across the state, lifting not only financial burdens but also the psychological stress, Sesso said. They hear that in the letters from grateful families, she said.
“You’ve taken this off my plate so now I feel I can work toward getting myself debt-free or really getting my financial house in order,” Sesso said.
It can also affect their health. In addition to making it harder for people to access health care, medical debt has been shown to increase stress that can worsen many health conditions.
“By lifting the burden of medical debt, you’re actually improving health itself,” Sesso said.
Getting the report that those donations could impact tens of thousands. “There’s not many things in my experience that feel better than that,” Crawford said.
It’s why he wants to start again in 2023.
“We’ll pick it up again next year,” Crawford said.
Ervin suspects that many of the bills just paid stemmed from the pandemic, but the need will not be going away anytime soon.
“It’s a constant battle,” he said.
