Community think tank The Collaboratory has a big goal: it wants to wipe out over $22.74 million of medical debt for people in the Miami Valley with incomes at or below four times the federal poverty level.
Through its partnership with the national nonprofit Undue Medical Debt, they could identify 13,000 qualifying residents in Montgomery, Clark, Darke, Preble, Greene, Miami and Shelby counties.
“The impact of medical debt is significant and it contributes to the overall lack of well-being for so many people. And ultimately, that hurts our region and our ability for people to contribute at an optimum level,” said Peter Benkendorf, founder of The Collaboratory.
It might sound like a steep goal, but they don’t need $22 million — just $127,650.
That’s because they plan to purchase the debt normally sold to collectors for a fraction of the unpaid bill. But instead of pursuing payments, Undue Medical Debt forgives them.
How does it work?
Benkendorf said the think tank drew inspiration from the Church of the Cross United Methodist in Kettering. The congregation raised money to erase $2 million in medical debt for roughly 2,600 area residents, he said.
“This is a debt of necessity. No one is choosing to get sick or be in an accident or be born with a chronic condition, right? This isn't the same as someone buying a flat screen TV or overextending themselves financially.”
Debt is sold in order for the original creditor to get back a portion of the money owed. And medical debt tends to be the cheapest debt sold. Benkendorf said for this campaign, they estimate each dollar can relieve $178 in medical debt.
To date, Undue Medical Debt has managed to forgive nearly $15 billion of medical debt for almost 10 million people across the country.
“We will go to hospitals, physicians groups, debt buyers, collection agencies, any entity that has acquired medical debts from the source from a provider,” Daniel Lempert, with Undue Medical Debt, said. "And we have a whole provider relations team where we will go out to them and say, ‘hey, can we look at your books?’”
From there, they look to confirm two different criteria: their geographic location and whether or not they have income at or below four times the federal poverty level.
“Medical debt is a growing crisis and it's even impacting the middle class or many individuals who might consider themselves middle class,” Lempert said.
A symptom of health care costs in the U.S.
A study published in the American Journal of Public Health finds that as many as 66.5% of people who file for bankruptcy cite medical bills as the main cause.
It’s a short term intervention, said Lempert, but it’s a symptom of a larger problem in the U.S. health care financing system.
“This is a debt of necessity. No one is choosing to get sick or be in an accident or be born with a chronic condition, right?” Lempert said. “This isn't the same as someone buying a flat screen TV or overextending themselves financially.”
High deductibles, co-pays for specialists, out-of-network visits are some of the common causes of medical debt the nonprofit sees, said Lempert.
Medical debt is more than just a financial burden, Benkendorf said.
“It can, in fact, affect your credit scores, which affects your ability to get a mortgage, get a car loan, all those other things,” Benkendorf said.
A federal regulation to ban credit bureaus from including medical debt on credit reports and credit scores sent to lenders was supposed to go into effect last month.
But Lempert said it's currently in limbo, with the Consumer Financial Protection Bureau being dismantled by the current administration. A Texas judge also filed a 90 day stay order, causing its implementation to be delayed.
“We support that rule fully. But I should say it remains to be seen if that rule will actually come into effect. It seems actually more likely now that medical debts will still be able to be reported to credit scores, unfortunately,” Lempert said.
Mercy Health, the state’s largest hospital system, is also partnering with them on the campaign.
“We know it’s important to support efforts like this so our patients can be relieved of the financial and emotional burden related to debt while also allowing Mercy Health to recover a portion of that debt to ensure we can continue to provide our community with high quality, compassionate care,” Ben Merick, Mercy Health vice president of operations, said in a statement.
Benkendorf said if they can have a successful campaign here, who says they can’t do it statewide?
“People are hurting from an issue that's uniquely American. By running the campaign, it gives us a platform to talk about the issue. It gives us legitimacy and it gives us the agency to go to Columbus to meet with our state representatives,” Benkendorf said. “How can Ohio get out front and get ahead of this issue? And what can the Dayton region, with our history of innovation, do to really lead the way?”
How to contribute
They’ve raised a little over $14,000 so far. The Collaboratory encourages local congregations, service clubs, and community organizations to help raise funds. Links to donate can be found on The Collaboratory’s website.
You can’t request to have your debt relieved through this program. However, if the partnership buys and forgives your bills, you will receive a letter from Undue Medical Debt.
