These days, one visit to the doctor or emergency room can have crushing financial consequences. The industries involved say they’re trying to reform the high prices, insurance denials, and billing errors that can pinch families for years.
Still, mounting medical debt continues to turn lives upside down every day.
Just ask Deanna and Kevin in Orinda.
“I rushed him to the emergency room,” Deanna said. “Next thing I know, he’s in the OR.”
Kevin required emergency abdominal surgery that saved his life. Now, he and his wife are fighting a new battle: the staggering bill.
“The total bill from the hospital was about $76,000,” he said.
His health insurance refused to pay, claiming an existing condition. He’s appealing. But, his case has been sent to a debt collector anyway.
“They call me at work,” Kevin said. “They call my family members looking for me.”
Now, a $76,000 cloud looms over the couple. They’re confident they’ll eventually prevail. But, they know many people do not.
“What are you left with? Bankruptcy?” Kevin asked.
Sadly, in many cases, yes. Medical debt is considered the number one cause of personal bankruptcies. A federal study estimated 43 million people are haunted by unpaid medical debt.
The debt files often include inflated charges and are riddled with errors. And yet, medical debt festers on credit reports.
“Fifteen million people go insolvent every year because of medical debt,” said Craig Antico, a former debt collector. “I know what this means to people.”
Antico formed an unusual nonprofit called RIP Medical Debt. He says RIP buys batches of medical debt, but instead of hounding consumers to pay, his charity simply forgives it and closes the cases.
“We actually put it into our debt cemetery,” he said. “No one can ever collect on it ever again.”
HBO’s John Oliver made Antico’s efforts famous when he announced he bought a bunch of debt in 2016.
“You are about to watch me give away $15 million,” Oliver exclaimed.
Now, NBC Bay Area is making a donation to RIP Medical Debt, too. The company is a making a $150,000 donation, which RIP will use to buy and forgive $15 million worth of medical debt for people around the country -- including $1.5 million worth for people right here in the Bay Area.
“You’re one illness away or one accident away from financial ruin in this country,” Antico said. “We need a secondary safety net. And that’s kind of what we’re doing.”
A look at how it works is a peek at the underbelly of debt collection. Say you go to a hospital, rack up a $10,000 bill, and end up in a payment dispute. The hospital might sell that debt to a collector for less. Then the collector tries to get the full $10,000.
Over time, your unpaid account might be bought and sold between various debt collectors, who pay less and less at each swap. Eventually, medical debt trades on this insiders market for just pennies on the dollar.
That’s when RIP Medical Debt says it identifies hardships, buys the accounts in bulk and closes them. Antico says for every $1 that’s donated, $100 in debt may be forgiven.
“Right now, I buy a hundred million-dollar portfolio, and it’s a random act of kindness to that thousand people who were in that portfolio,” he said.
Kevin and Deanna are still battling their insurance company. They’re hopeful something will change the system as a whole -- from hospitals to insurance to debt collectors -- in order to lift this heavy financial burden from families like theirs.
“It baffles me,” Deanna said. ” It makes me mad that this is the kind of system that we have.”
We couldn’t ask for the debt of specific people, like Kevin and Deanna, because it’s being bought in bulk. If your account is part of the batch of $1.5 million in the Bay Area that RIP buys and will forgive, you will get a yellow note in the mail soon.
If you get one, we would love to hear from you. But even if you don’t want to contact us, please hold onto it. That’s proof that your debt has been forgiven -- and the debt collector calls should stop.
RIP Medical Debt accepts donations from members of the public, too.
As we would with any charity, we encourage you to first check out what RIP is doing. We have also posted its tax forms here, for your review. Again, as with any charitable contribution, make sure you’re comfortable with its mission before you donate.
NBC Bay Area is not collecting or receiving any information provided in the fields below. This goes directly to the charity.