INDIANAPOLIS, Ind. - FOX59 is making a difference for struggling Hoosier families by donating $15,000 to abolish nearly $1.5 million dollars in medical debt.
The medical debt crisis
From cancer to car accidents, thousands of Hoosiers are drowning in medical debt--people like Cherry Storms-Blair and her daughter Jada. Last month, we told you how this mother and daughter were in the middle of a financial crisis. And it all started when Jada got hurt in a car accident.
"All four limbs broken. A compound fracture on her left leg. Her right arm was broken in two places," recalled Storms-Blair as she went through the extensive list of Jada's injuries. "Her fingers were the first things that I kissed for her, because I just couldn't touch her anywhere else. She was so broken."
With round the clock medical care, Jada survived. Her health insurance picked up some of the bills, but the family told FOX59 the driver who hit Jada did not have insurance. So now the family is left in serous debt.
"Over probably a million dollars easy," said Storms-Blair. "They saved her life and we just can't pay `em."
According to TransUnion data provided to us by former debt collectors, 23% of Hoosiers in central Indiana currently have medical debt in collections. That means, as of September 2018, there are 678,942 Hoosiers who owe nearly $900 million.
That fact did not sit well with us. So we got to work.
RIP Medical Debt - How does it work?
FOX59 went to New York City to meet the team that's forgiving millions of dollars in medical debt. The nonproft is called RIP Medical Debt, co-founded by two former debt collectors: Jerry Ashton and Craig Antico.
So how does it work?
RIP Medical Debt says it buys up debt in the secondary market for pennies on the dollar. Except, unlike debt collectors, they use donations from foundations and companies that want to help their communities. Once they buy up the debt with donor dollars, they don't collect on it. They forgive it. (Learn more here.)
In the debt-buying world, there's a lot of bang for your buck.
"One dollar wipes out $100. Ten dollars wipes out $1,000," explained Antico.
By the end of the year, they hope to have forgiven a billion dollars in medical debt.
We wanted in on it.
FOX59 donated $15,000 to pay off nearly a million and a half dollars for Hoosiers in central Indiana.
"We know that everybody's affected regardless of party, religion, sex, whatever. Everybody is suffering from this," said Ashton. "We're here to cure medical debt."
Within days of buying up the debt, the recipients receive an envelope in the mail with the good news. Ashton and Antico said there are no strings attached. The debt is forgiven, forever.
Who gets chosen?
Right now, the donor cannot choose whose debt is forgiven.
When RIP Medical Debt purchases a portfolio of debt, it can only narrow it down to people who:
- Earn less than 2x the federal poverty level
- Have debts 5% or more of annual income
- Face insolvency — debts are greater than assets
"I'm about to buy portfolios that have a hundred thousand people in them," said Antico. "Most of these people can't pay and will never be able to pay."
FOX59 sent in its donation and in a matter of days, our recipients will be receiving a white envelope in the mail. The envelope will have the FOX59 logo on the outside. Inside, there will be a letter telling you how much of your medical debt was paid off. In some cases, it could be all of it.