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Web Broker Makes Stressed-Out Patients Its Cause

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A health insurance web broker has come up with a new way to get attention by doing good: It’s contributing to a charity that buys portfolios of delinquent medical debt, then cancels the debt.

The web broker, GetInsured, announced earlier this week that it has contributed enough to the charity, RIP Medical Debt, to cancel $580,899 in delinquent medical debt in Nevada.

(Related: GetInsured Courts Agents With ACAExpress Deal)

Earlier, the company worked with RIP Medical Debt to cancel $1.9 million in medical debt in California, and $1.1 million in medical debt in Minnesota.

Canceling medical debt can be an efficient way to reduce consumers’ burdens: RIP Medical Debt says it can often get medical debt canceled for about 1 cent on the dollar. That means canceling $10,000 in debt could cost about $100.

RIP Medical Debt is organized as a 501(c)(3) charity. GetInsured and other donors can deduct contributions to the group from their taxable income.

RIP Medical Debt holds portfolio purchase costs down, and avoids helping patients who might have the means to pay their bills, by limiting itself to buying portfolios of delinquent debt owed by families that earn less than 200% of the federal poverty level.

Most of the families involved have debts that amount to 5% or more of their annual income, and most of the families have debts that are greater than their assets and are facing insolvency, according to RIP Medical Debt.

The group estimates that Americans now generate about $100 billion in delinquent medical debt each year.

In 2016, John Oliver, the host of HBO’s “Last Week Tonight,” reported that he’d been able to buy, and cancel, $15 million in delinquent medical debt for $60,000, or 40 cents per $100.

GetInsured’s Message

GetInsured has been using its RIP Medical Debt contributions to communicate the message that consumers need to choose the right health coverage.

The company says it recently conducted an online survey of 390 Nevada adults.

About 62% said they had received a high medical bill that was surprise, or was difficult to pay off, according to GetInsured.

Chini Krishnan, the chief executive officer of GetInsured, said in a statement that his company’s goal is for all people in Nevada to have access to high-quality health care.

“It is worrisome that so many are forgoing medical treatment due to cost, and troubling that emergency room visits — among other critical health services — are driving hard-working Nevadans into debt,” Krishnan said.

The Patients’ Share of Spending

Federal government health spending figures show that patients’ out-of-pocket spending on health care has grown much more slowly than other players’ spending on health care over the past 30 years.

Out-of-pocket spending accounted for just 10% of U.S. health spending, or $365 billion of the total, in 2017, according to analysts at the Medicare Office of the Actuary.

Patients’ share of total health spending was  down from 13% in 2007, from 14% in 1997, and from 21% in 1987.

A team of researchers led by Carlos Dobkin reported in  the New England Journal of Medicine in March 2018 that a high percentage of “medical bankruptcies” are really the result of a patient’s loss of ability to earn an income, not medical bills.

But U.S. patients’ out-of-pocket spending increased 22% more between 1987 and 2017 than the Social Security Administration’s national average wage index.

Analysts at the Urban Institute and elsewhere have published survey data suggesting that medical debt continues to cause serious problems for about one-quarter of nonelderly U.S. adults.

— Read John Oliver Puts Medical Debt on TV, on ThinkAdvisor.

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