How Does RIP Medical Debt Work to Clear Billions in Debts

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Credit: pexels.com, A $50 bill with a bandage symbolizes financial recovery and repair.

RIP Medical Debt is a non-profit organization that has made a significant impact in clearing billions of dollars in medical debt.

RIP Medical Debt was founded by two men, Abraham Tischler and Jerry Ashton, who were inspired by a 2014 article in ProPublica about debt collectors selling medical debt to third parties.

The organization's approach is unique in that they don't just provide financial assistance, but also work to eliminate the underlying debt.

RIP Medical Debt has been able to clear billions of dollars in debt by leveraging a combination of donations and a clever approach to debt elimination.

A different take: Roofers Rip

How It Works

RIP Medical Debt collects funds from donors to buy bundled debt portfolios at a steep discount, often averaging just a penny on the dollar. This means that wiping out $100 of medical debt would cost about $1.

The organization looks for people who earn less than two times the federal poverty level, have debt that is 5% or more of their annual income, or face insolvency, meaning their debts are greater than their assets.

Credit: youtube.com, What Is RIP Medical Debt? - CreditGuide360.com

To determine which people are eligible for relief, RIP Medical Debt works with third-party credit data providers to locate accounts that meet its criteria.

The debt portfolios often have already passed through several collection agencies, and debt buyers know it could take them months or years to collect on them.

Once RIP Medical Debt takes on the debt, it's forgiven, and people get a letter telling them their debt is gone.

Worth a look: Rip Medical Debt News

Impact of Medical Debt

Medical debt can have a profound impact on a person's life, causing stress and affecting other areas of life.

One in five working-age Americans have trouble paying their medical bills, according to a 2016 Kaiser Family Foundation/New York Times survey.

Medical debt can damage credit, making it difficult to buy or rent a home, and is a common factor behind bankruptcy.

An estimated 27.5 million people in the US did not have health insurance at all in 2018, according to the latest data from the Census Bureau.

Credit: youtube.com, RIP Medical Debt: Abolishing crippling health care debts

Even for people who do have health insurance, costs and deductibles have been growing faster than their incomes, making it harder to afford medical expenses.

Medical debt can even drive people to forgo care for fear of being unable to afford costs, which can lead to further health problems and a cycle of debt.

Rip Medical Debt's Mission

Rip Medical Debt is a non-profit organization that aims to eliminate medical debt for millions of Americans.

Their mission is to help those who are struggling to pay off medical bills, often due to unforeseen circumstances or lack of insurance.

Rip Medical Debt's founders were inspired by a 2016 ProPublica report that highlighted the issue of medical debt in the US.

This report revealed that medical debt is a major cause of bankruptcy in the US, with over 66,000 people filing for bankruptcy due to medical expenses in 2012.

Rip Medical Debt's approach is to purchase medical debt at a fraction of its value, allowing them to forgive the debt entirely.

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Credit: youtube.com, RIP Medical Debt Forgives Medical Debt in North Texas

By doing so, they aim to bring relief to those who are struggling to pay off medical bills and improve their overall well-being.

Their work is focused on individuals who are struggling to pay off medical debt, rather than hospitals or healthcare providers.

Rip Medical Debt's goal is to eliminate medical debt for millions of Americans, rather than just providing temporary assistance.

Initial Media Attention

The charity Undue Medical Debt gained significant attention in 2016 when the TV show Last Week Tonight with John Oliver used them to turn $60,000 into $15 million of debt relief.

This attention sparked further coverage, including a profile by CBS News Sunday Morning in April 2023, which reported that the charity had already extinguished more than $9.5 billion in medical debt.

In January 2024, New York City invested $18 million over three years to abolish over $2 billion in medical debt in partnership with Undue Medical Debt.

Rip Medical Debt's Approach

Credit: youtube.com, RIP Medical Debt on NBC New York

Rip Medical Debt uses a data-driven approach to identify and eliminate medical debt.

They partner with non-profit organizations and community groups to get access to medical debt data.

The organization uses this data to identify individuals and families struggling with medical debt.

Rip Medical Debt then uses this information to target specific medical debts for elimination.

In some cases, they work with hospitals and healthcare systems to reduce or eliminate medical debt.

The organization's goal is to make a significant impact on the lives of those struggling with medical debt.

Frequently Asked Questions

Is RIP Medical Debt a legitimate charity?

Yes, RIP Medical Debt is a legitimate 501(c)(3) nonprofit organization that has been erasing medically burdensome debt since 2014. Founded by former debt collection executives, they are a trusted charity dedicated to strengthening communities.

Is it true that all medical collections are $500 will automatically be removed from my credit report?

As of April 2023, medical debts under $500 are no longer reported to credit bureaus, but debts over $500 can still be reported after one year. However, not all medical collections over $500 will be automatically removed from your credit report.

Felicia Koss

Junior Writer

Felicia Koss is a rising star in the world of finance writing, with a keen eye for detail and a knack for breaking down complex topics into accessible, engaging pieces. Her articles have covered a range of topics, from retirement account loans to other financial matters that affect everyday people. With a focus on clarity and concision, Felicia's writing has helped readers make informed decisions about their financial futures.

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