Hundreds of people in Appalachia, most of them in Eastern Kentucky, have had $8 million in medical debts paid off by a nonprofit organization that uses donations to buy “bundles of old debt for pennies on the dollar and abolish it at often 10 or 15 percent of the original cost,” Alex Acquisto reports for the Lexington Herald-Leader.
“RIP Medical Debt, a New York-based nonprofit debt buying company, announced last week it had paid outstanding medical bills for people in more than 50 counties across Central and Eastern Kentucky, as well as residents in Appalachian regions of Virginia and West Virginia,” Acquisto writes. Letters to the debtors went out July 29, company co-founder Craig Antico said Aug. 2.
Acquisto explains how it works: “Debt collectors, knowing this type of debt is unlikely to be repaid, have a vested interest in selling it to another debt buyer willing to offer immediate money, even if it only covers a fraction of the total amount. . . . A $100 donation through the organization can slash up to $10,000 in medical debt.”
She offers more detail: “Antico and his company purchase bundled debt portfolios from debt sellers and medical providers that are the least likely to be repaid — least likely because the debt has existed for typically between two and seven years, and the people who’ve accrued this debt earn less than two times the federal poverty level.”
Tim Marema of The Daily Yonder reports, “The organization sends notifications to the affected individuals and reports the erasure to credit bureaus, which improves credit scores. About 300,000 people have had a combined debt of $800 million forgiven through the organization; the average person has $2,600 of debt forgiven.”
RIP Medical Debt targets certain regions or populations, and allows donations for that purpose. The main contributors toward the Appalachian debt relief were Jim and Sharon Branscome of Montrose, Colo., who met when they worked for the Appalachian Regional Commission. The son of a coal miner in Southwest Virginia who died of black-lung disease, Branscome said they gave $80,000 partly to help disabled miners and those struggling with opioid addiction. Branscome, a former reporter for The Mountain Eagle in Whitesburg, was managing director of equity research for Standard and Poor’s.