Local initiative wipes out $21M of medical debt for more than 15,000 people

The average amount of medical debt that was eliminated ranged between $1,000 and $1,700 across seven counties.

For the 15,378 people impacted, though, a single mom in Xenia with medical debt upwards of $69,000 was among those helped. The medical debt stemmed from the Xenia woman beating stage 2 papillary thyroid cancer — the treatments for which her insurance company said it wasn’t covering, according to her impact statement, which was anonymous.

The Greene County Democratic Party helped raise about $15,000 to help the campaign, Benkendorf said. The Democratic parties in Logan and Shelby counties then joined in the campaign to help forgive medical debt in their counties.

“All of our partners were just overwhelmed, ultimately, by the outpouring of support,” Benkendorf said.

Purchasing medical debt for less than its worth

The Dayton Collaboratory and other organizations partnered with the national nonprofit Undue Medical Debt to purchase the medical debt for a fraction of the original cost. Every $1 donated relieved about $178 in medical debt, according to the Dayton Collaboratory.

“We’re just taking advantage of the for-profit debt landscape. All debts can be bought and sold very cheaply. Often for pennies or less on the dollar,” Daniel Lempert, vice president of marketing and communications at Undue Medical Debt, previously told this newspaper.

Through its debt-acquisition practices, Undue Medical Debt honed in on the debt of individuals who were earning at or below four times federal poverty or those for whom medical debt was 5% or more of their annual incomes.

The breakdown of the Dayton Collaboratory Medical Debt Fulfillment includes:

There are no concrete plans to hold another campaign, according to Benkendorf, who said he hoped the initiative showed how the system needs changing.

“I think the reason to do it again would be to prove the point that we can’t keep just doing it again,” Benkendorf said.

Postponing care due to costs

He talked to people with medical debt who limited the amount of care they sought, which can prolong or worsen health problems if left untreated.

“I think the impact is far greater than people realize,” Benkendorf said. “Or again, what’s the cost from somebody rationing their own health care because they’ve got medical debt?”

National studies have shown that there is a connection between health outcomes and medical debt, such as increased mortality rates.

In a study done by researchers at the American Cancer Society, patients newly diagnosed with cancer living in counties in the U.S. with the highest quartile of medical debt had a 17% increased risk of death compared with those living in counties with the lowest quartile of medical debt.

Additionally, people with cancer-related medical debt are less likely to be up to date on their recommended cancer screenings compared to people able to pay for their cancer care without incurring debt — 77% of those currently in debt are up to date on their screenings compared to 94% of those who have been able to pay, according to the American Cancer Society.

One-quarter (25%) have delayed or skipped medical care to avoid further debt related to their cancer care. One in five (21%) were required to sign up for a payment plan or medical credit card before they could be treated and 14% were required to pay in full before they could be treated, according to the American Cancer Society.

The Ohio Medical Debt Fairness Act

Benkendorf pushed for solutions like in House Bill 257, or the Ohio Medical Debt Fairness Act, which would:

Committee activity on the bill shows a split between health care groups being proponents of the bill while financial institutions appear largely in the opposition to the proposed legislation.

“Unfortunately, people with cancer often bear significant health care costs because they can have substantial health care needs, are high utilizers of health care services, use many different providers, and sometimes require more expensive treatments,” Leo Almeida, Ohio government relations director for the American Cancer Society Cancer Action Network, said in testimony before the Ohio House Health Committee.

As a result, patients with cancer often experience financial consequences from medical debt, Almeida said, citing a study in the Journal of Clinical Oncology that found cancer patients were 71% more likely than Americans without the disease to have bills in collections and to face tax liens and mortgage foreclosure. They were also 2½ times more likely to declare bankruptcy.

Zachary Taylor, director of government relations for the Consumer Data Industry Association, wrote in testimony for the the House Health Committee that the proposed legislation ”relies on a definition of medical debt that is excessively broad and would open the door to significant operation challenges."

If health care costs are mixed with other purchases on a credit card, Taylor said it’s not clear whether that debt would need to be removed from a credit report due to consumer reporting agencies not receiving transaction-level data.

Medical debt also has a “yearlong grace period,” Taylor said.

“Unpaid medical debts must be more than $500 and outstanding for more than 365 days before any of the three national credit bureaus will show the account in a consumer report,” Taylor said.

“For unpaid amounts greater than $500 and more than 365 days past due, upon repayment of outstanding amounts, these accounts are removed immediately from a consumer’s report, unlike other debts.”