Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowMore than 112,000 central Indiana residents will receive letters this week stating “you no longer owe your medical debt listed.”
The letters aren’t a scam. It’s part of a partnership between the United Neighborhood Centers of Indianapolis, United Way of Central Indiana and national not-for-profit Undue Medical Debt.
The idea of collaborating on medical debt relief was first proposed as part of the East Side Economic Recovery and Mobility District, said Peggy Frame, executive director of Southeast Community Services. The district was created in 2019 to develop strategies between nearly 20 local organizations.
“It’s time for us to acknowledge that health care is a fundamental human right, not a privilege reserved for the wealthy,” Frame said. “We must strive for a system that ensures affordable access to quality care without the fear of financial ruin.”
The United Neighborhood Centers of Indianapolis includes 13 neighborhood centers, which worked in concert with United Way of Central Indiana over the last several months on the effort. United Way engaged with Undue Medical Debt to establish the partnership, said United Way of Central Indiana Vice President of Government Relations Sam Snideman.
In total, $1.7 million will relieve more than $239.6 million owed by 112,018 residents. Those individuals had to meet either a household income threshold at or below 400% of the federal poverty level. For a family of four, that’s an annual income of less than $125,000 —or have a medical debt burden of 5% or more of their annual income, per Undue Medical Debt’s standards. They were identified through a blind algorithm used by the national not-for-profit that involves information from health care providers and medical debt providers.
Most of those funds came from an anonymous donor, who gave $1.2 million to the national not-for-profit Undue Medical Debt to abolish more than $169 million of debt for 74,013 people in Marion County. According to United Way, one in five Marion County residents have medical debt in collections.
Snideman described the donor simply as “someone who has some longstanding interests and partnerships across Marion County.”
He told IBJ that Monday’s announcement “has been a really great example of the power of building community-interested donors, and direct service providers and other philanthropic groups coming together to do something really helpful.”
United Way of Central Indiana contributed an additional $500,000 to Undue Medical Debt to abolish more than $70.4 million of additional debt for more than 38,000 people throughout United Way’s service area of Boone, Hamilton, Hancock, Hendricks, Marion, Morgan and Putnam counties. That funding came from a 2021 donation made by philanthropist and author MacKenzie Scott, which totaled $25 million.
Undue Medical Debt uses donations to buy medical debt in bulk at a significant discount–often for pennies on the dollar or less. Then, rather than collect the debt, the not-for-profit abolishes it instead. As a result, every dollar donated eliminates an average of $100 in medical debt.
Sean Huddleston, president of Martin University, worked with the anonymous donor on four priorities for state lawmakers and health care providers to address related to medical debt.
“The bigger story is the massive problem medical debt creates in our country, state and neighborhoods,” Huddleston read in a letter from the donor.
Those priorities are:
Strengthening charity care policies: by increasing the income threshold to qualify; establishing policies requiring patients be screened before billing to determine eligibility for financial assistance; and notifying patients of discount options at each payment point in case their income has changed.
Limiting damage to credit scores: by preventing medical debt from being reported against patients’ credit scores and preventing wage garnishment to collect unpaid medical debt.
Addressing billing and collection practices: by requiring debt collectors to inform patients if their debt has passed statutory repayment terms.
Controlling the cost of care: by requiring providers to delay medical debt being referred to collections while billing is being appealed; establishing pricing transparency and standardization; encouraging hospitals to enroll uninsured patients in ACA plans, Medicaid or other resources to ensure the cost of future care would be covered.
Huddleston said providers such as IU Health, Eskenazi Health, Ascension St. Vincent and Community Health Network have showed promise in these areas.
Please enable JavaScript to view this content.
After watching the John Oliver on medical debt and the ancillary industries surrounding making people’s lives miserable after having to deal healthcare providers, I’ve always wanted to do something similar if I won the lottery…
There’s something extremely wrong with providers getting the ability to take a tax write off AND be able to sell the debt off to harassing collection leeches…If enough of an impact was being made to grab the eyes of the IRS then things -could- be changed and we’re all treated like humans again..
Being that more than 70+% of “providers “are now employed by healthcare systems, you need to focus your discontent on the healthcare systems, not the individual physicians and others. And your premise that providers could write off bad debt is in accurate also.
If it were not for Congress, hospitals would be able to negotiate directly with the consumer, so the consumer could pay 10 cents on the dollar for the medical care.
Because Medicare has a guaranteed lowest cost, hospitals cannot legally negotiate with the patient below that cost. Hospitals do not pay income taxes (often not paying property taxes either); this is by design in exchange for the medical care that they provide for discounts or free. So, the hospitals are encouraged to have super high prices on their chargemasters that then get written off. And, these paper losses help offset the revenue that hospitals take in to show a more balanced balance sheet.
Patrick G. is correct. Hospitals also used to, and may still, receive an annual ‘supplemental check’ from MedicareMedicaid to offset uninsured and free care they provided. Depending on the hospital’s size this could be in the tens of millions of dollars.