The surprise letters landed last month in the mailboxes of 472 low-income residents of Texas and Arkansas, all of whom were struggling with medical bills.
After a short introduction, the letter explained: “This [medical] debt has been canceled and abolished by funds donated by the Congregation of Lord of Life Lutheran Church in Maple Grove Minnesota.”
Erasing such health care debts has become the latest mission of Lord of Life, which is the first church in the state to partner with an unusual New York-based nonprofit called RIP Medical Debt. The organization buys outstanding medical debt in bulk at pennies on the dollar, and then directs charitable donations to pay off the medical bills of people in need.
The modest $15,000 donated by Lord of Life church paid off more than $1 million in debts, said the Rev. Joel Wight Hoogheem. Average debt erased was about $3,000, he said.
Wight Hoogheem said he’s long been aware of the stresses facing people who have medical bills they simply can’t pay. It’s not unusual for them to reach out to their faith communities, often with a sense of shame.
“We will get requests for assistance both at [my] church and other churches I’ve served that have good Samaritan funds,” Wight Hoogheem said. “I’ve seen families that have to make a choice: Do we pay Xcel [Energy] this month or the medical bill? And there are ramifications of both.”
In addition, studies have shown that about two of three people filing for personal bankruptcy cite medical bills as a leading cause, Wight Hoogheem said.
“It’s a cloud always hanging over people’s lives,” he said.
The idea to join RIP Medical Debt came from Skip Lieser, a church member and retired senior finance executive at a large Minnesota corporation. Lieser said he heard about the organization on the radio last fall and decided to check it out.
“My antenna went up at first,” Lieser said. “How can they do so much with so little [money]?”
Lieser went online and checked out the financial audit posted on the RIP Medical Debt website. He called several churches that have donated. He learned that the Minnesota Nurses Association has been donating to RIP Medical Debt for several years, so he called someone there as well.
Satisfied that the program was sound, Lieser suggested to Wight Hoogheem that the church donate funds. Lord of Life tapped $15,000 from its charitable giving fund and sent it away.
The money was distributed last month to folks primarily in two counties in Texas and one in Arkansas, where more than 400 residents received letters in the mail with the unexpected surprise. RIP Medical Debt works primarily in the Appalachia area and seven Southern or Western states where the medical safety net is sometimes frayed.
The nonprofit does not assist people in Minnesota at this time, said Wight Hoogheem, as it is still unclear whether their work conflicts with the state’s consumer protection laws.
RIP Medical Debt co-founder Craig Antico, a former debt collector, said he was intrigued when he saw another nonprofit providing a similar service. After that nonprofit ended its debt work, Antico and co-founder Jerry Ashton launched RIP Medical Debt in 2014.
The nonprofit buys outstanding debt in bulk from medical debt buyers who typically collect 2 to 5% of the debt they hold, Antico said. RIP Medical Debt takes it off their hands, but for less than 1% of the debt.
“We have erased $1 billion in debt for 520,000 families,” said Antico. “About $500 million was abolished by faith-based groups.”
Lieser, who has been involved in charitable work in the Twin Cities for years, said getting involved in debt removal “felt like something we should do.”
“The thing with medical debt is it’s not something people choose,” said Lieser. “People don’t choose to have a car accident or cancer.”
One in four Americans reported that they or someone in their family had difficulties paying medical bills over the past year, according to a 2015 survey by the Kaiser Family Foundation. The figure jumped to 37% for those with incomes of less than $50,000 a year. Six in 10 had insurance when the debt began.
Lord of Life is expected to launch a more significant fundraising campaign for RIP Medical Debt next year, Wight Hoogheem said. The church ideally would like to help Minnesotans in debt, but until and if that is ironed out, it is thrilled that relatively small donations can do so much good.
“I was skeptical too,” Wight Hoogheem said. “But by all accounts available to us, it’s actually happening.”