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Some Finger Lakes Households On Verge Of Erasing Medical Debt

ROCHESTER, NY (WXXI) - Over $2 million of medical debt across New York state is about to be erased. It’s due to the efforts of two friends, 70-year-old Caroline Kenyon and 80-year-old Judy Jones, both of Ithaca, who raised $12,500 that they’ve donated to an organization called RIP Medical Debt. When patients are unable to pay their bills, medical providers often sell the debt to collections companies. Those companies, knowing they likely won’t recoup the full value of the debt, buy it from the medical provider for less than its face value. If they encounter difficulty collecting the debt, they can sell it to another company at an even more discounted rate. That’s what enables Kenyon and Jones to buy millions of dollars of debt with just over $10,000 of fundraising.

The good – and potentially life-changing – news about the erased debt will be delivered in yellow envelopes this month.

Kenyon, a counselor and therapist, said she commonly sees clients whose mental health is affected by the medical debt they owe. “The emotional turmoil that medical debt is causing them, just because they were unfortunate enough to either have an accident or get sick, it’s just heartbreaking,” said Kenyon. “Some people used up all or most of their savings. Sometimes, someone in the house took on an extra job or worked more hours. They would borrow money from family or even friends.” One of her clients was a mother who was helping her daughter pay her medical bills, until the mother suddenly faced a daunting bill of her own, Kenyon said. “Even though she continued working and continued having insurance, she had to file for bankruptcy.” Both women said they had never run a fundraising campaign like this. Jones, a retired chemist, said her feelings rose and fell like a roller coaster. “It started out seeming insurmountable, but I’m always optimistic,” she said. The women got an early batch of donations that buoyed their expectations, only to see contributions slow to a halt after a few weeks. “We sent out reminder notes, and we hoped,” Jones said. Finally, a family foundation that asked to remain anonymous donated the rest of the money they needed to reach their $12,500 goal. “I was sort of jumping around. Carolyn was out; I had to leave her a phone message, as I remember. She called me back and said, ‘thank you for making my day,’” Jones said, recounting the moment she learned they had enough money to trigger RIP Medical Debt’s purchase. The company buys debt in bundles, said spokesperson Daniel Lempert. Its buyers work to ensure that the debt is owed by people in need: those with an income twice the federal poverty line (about $50,000 for a family of four) or lower, with debts more than 5 percent of their annual income. But Jones and Kenyon both say buying and forgiving debt is a short-term solution. They’ve become advocates for the New York Health Act, which is designed to set up a single-payer system to provide health coverage for all New Yorkers. The bill passed the Assembly in June but has not yet been heard in the state Senate. “The profit-driven model of health care is the root of the medical debt problem,” Kenyon said. “There will continue to be medical debt, as long as we have this health care system based on making a profit.”