Some Kentuckians living in central and eastern counties with medical debt may find out soon their bills have been paid off.
A large donation from two families with Kentucky ties — in collaboration with a debt forgiveness nonprofit — will pay off about $8 million in debt in Appalachian counties from New York to Alabama.
“We’ve already started sending the letters out — people can look for these yellow envelopes with RIP Medical Debt on them,” said Craig Antico, co-founder of nonprofit RIP Medical Debt. “And what it says inside is that these accounts have been abolished: they’ve been bought from the hospital or a collector, and they no longer are owed. And it is a gift from a donor.”
The nonprofit buys debts from medical providers or collection agencies at a much lower rate than what a patient might actually owe. Antico said as little as a dollar can pay off $100 in debt.
“We can identify the people within these portfolios that really can’t pay, that are in a hardship or are very poor,” Antico said.
The donation comes from Jim and Sharen Branscome, who previously lived in Kentucky. The money will wipe out debt for families making twice the poverty level, or about $51,500 for a family of four. The donation will go to people across Appalachia, and according to RIP Medical Debt, will wipe out most of the currently reported medical debt in Eastern Kentucky, Southwest Virginia and parts of southern West Virginia. Kentucky counties included range from the very eastern edge of Kentucky to Monroe and Metcalfe counties.
“Health statistics in Appalachia are among the worst in the country, and medical debt prevents people from getting the care they need to improve their lives,” wrote Jim Branscome, who wasn’t immediately available for comment, in a press release. “For just a penny on the dollar, RIP Medical Debt can wipe out debts and clear the credit history for thousands with our donation.”
Kentucky has the sixth highest rate of adults between ages 18 and 64 that had medical debt in 2015, behind Indiana, West Virginia, South Carolina, Mississippi and Arkansas. About 30.9 percent of Kentuckians self-reported past-due medical debt that year, which was actually down from 42.1 percent in 2012, according to an 2017 Urban Institute study.
Kyle Caswell, a senior research associate at the Urban Institute and co-author of the study, said that the creation of insurance exchanges have helped people with medical debt. But having health insurance can also mean having a high deductible, which is the amount a person has to pay before insurance kicks in.
“There’s a lot of reasons why it might be the case that people have debt, like levels of their health insurance,” Caswell said.
Caswell said the expansion of Medicaid to include people making up to 138 percent of the poverty limit has helped improve Kentuckians’ chances of avoiding medical debt. However, people still fall through gaps in coverage or make too much to qualify for Medicaid.
“It would be nice to move past a state where we have to rely on third parties to step in to address these issues,” Caswell said, referencing the donations.
Previous Kentucky residents Bill Bishop and Julie Ardery also donated $20,000 to a RIP Medical Debt fundraiser to pay off additional debt.