Anyone who’s been mired in medical debt is intimately familiar with the swell of anger a ringing phone can trigger and the dread that can wash over a person as they open their mailbox.
Answering the call will invite a stranger’s voice to coldly explain the conversation is being recorded; opening the mailbox might reveal another stack of letters from debt collectors insisting the recipient immediately pay an overdue balance or face legal action.
Both the call and the letters will serve as the umpteenth reminder of what the debtor already, painfully knows: they owe money they cannot pay.
Kellan Potts has seen what crushing medical debt can do to a family. Raised on a shoestring by a pair of blue-collar workers in Hamilton County’s remote Possum Creek community, he grew up without health insurance and lacked medical care when he likely needed it.
“Whenever my brother or I were hurt, we wouldn’t go to the doctor because we couldn’t afford it,” Potts recalls. “An ambulance ride to the hospital would’ve broken us.”
When Potts was 10, he tore his knee open to the bone. Instead of asking his mother to drive him to the emergency room, he wrapped the injured joint in duct tape and paper towels.
The dark specter of medical debt found Potts’ family despite their application of homespun remedies. His father, a house painter, died when Potts was 10, and his mother, a warehouse employee, later became sick and was no longer able to work. The phone calls and the letters soon followed.
This is a common story in the U.S., though the setting is not always an outlying community of impoverished laborers. Forbes declares medical debt to be the nation’s new chronic condition in a 2021 article that says 50% of Americans owe money to a medical provider, while The Guardian urges, “Don’t get sick; it’s too expensive,” in a December 2023 article that discusses how medical debt is putting more Americans in financial crisis.
In the midst of this national dilemma, one nonprofit is taking a grassroots approach to solving not the larger issue but the problems of individuals who find themselves among the 100 million Americans (according to KFF Health News) who are saddled with health care bills: RIP Medical Debt.
Launched in 2014 by two former debt collectors, RIP purchases medical debt on the collections market and then forgives it. The founders of the nonprofit, Jerry Ashton and Craig Antico, spent decades hounding debtors to pay their bills before deciding to introduce a way to pay off debts instead, says Daniel Lempert, RIP’s vice president of communications.
“During the Occupy Wall Street movement, Jerry learned about the various groups that were looking for ways to take advantage of the for-profit debt industry,” Lempert recalls by phone from Brooklyn, New York. “Basically, medical providers sell debts in large bundled portfolios for pennies on the dollar. Collection companies purchase these portfolios and then try to collect the original amount. Jerry realized a philanthropic organization could use donated money to buy these cheap debts and then erase them for people.”
After paying off a debtor’s medical bills, RIP notifies the person of the unsolicited gift by mail. Until the individual opens what they probably assume is another demand for payment from a collector, they’re unaware of their relief from debt, as they cannot apply or otherwise seek out aid from the organization.
“Our debt relief notices come from out of the blue,” Lempert says. “We hear from a lot of people who were amazed that a stranger performed this act of generosity without knowing who they are.”
Lempert personally spoke with a veteran of the Armed Forces who was injured during his time of service and had over $500,000 of medical debt as a result. The man told Lempert he felt like a failure because medical debt had tarnished his credit report, and said having even a portion of his debt forgiven would be lifechanging.
“Our work can have a great impact on someone’s life,” Lempert adds. “That gets us out of bed each morning.”
To ensure RIP derives the greatest possible benefit from the donations it receives, the 501(c)(3) follows specific criteria when sourcing debts. RIP uses FinThrive, in partnership with one of the three main credit reporting agencies, to look at debt files, says Lempert. It then acquires and erases debts for families that are up to four times above the federal poverty level, or for individuals who have medical debt that’s 5% or more of their annual income.
(According to the most recent report from the U.S. Census Bureau, the poverty threshold for a family of four is $29,960. For an individual, the poverty threshold is $14,891.)
To gather donations, RIP works with collaborators around the U.S. to run local fundraising campaigns. Potts, an attorney with Mincy Law in Chattanooga, is one such ally. He says he felt compelled to contribute his time and resources after reading an article about RIP.
“I’m fortunate; I escaped the cycle of poverty,” says Potts, who concentrates on domestic law. “I can provide for my family, and hopefully, my kids won’t go through what I went through. This has given me a desire to help others.”
Potts did his due diligence before deciding to launch a local fundraiser for RIP. He says his research revealed that the nonprofit uses every dollar it receives to pay off and forgive medical debt.
What’s more, Potts adds, donations often have an exponential impact because not only do debt collection companies purchase debts for less than the people owe, but they also often settle for less than the original amount.
“One dollar donated to RIP on average abolishes $100 of medical debt,” notes Lempert. “So, you can provide an impressive return on investment for the donor.”
Finally, RIP purchases local debt when it’s available, ensuring donors are able to impact the lives of those who live in or near their community, explains Potts.
“Once RIP collects the money from a fundraising campaign, it analyzes debts by county, starting locally. If there’s nothing available where the campaign took place, they spread out from there. However, the money will stay in the state.”
Potts has launched a campaign to reach $10,000 in donations, which he says has the potential to pay off $1 million of medical debt for Tennesseans. A person with RIP told Potts the nonprofit has access to $20 million worth of medical debt in Tennessee alone, so the money will be put to use.
After the campaign closes in March, RIP will send Potts a breakdown of how it spent the money.
Potts, who together with Mincy Law founder Chrissy Mincy will be contributing $1,500 to the tally, says he’s looking forward to receiving that email. “It will mean RIP has stopped a deluge of calls, letters and other threats,” he adds. “If I can help to lift that crushing weight off one family, it’ll be worth it.”
If the fundraising campaign Potts is running doesn’t reach its $10,000 goal, RIP will still use the money collected to purchase debt in Tennessee. However, Potts says he’s confident the campaign will meet and even exceed its objective.
“Chattanoogans are a generous bunch,” he continues. “They truly want to help their fellow person. I know I do. I have a lot of faith in this city.”
To donate, load the QR code that accompanies this article on a smartphone or go to ripmedicaldebt.org/campaign/tennessee-3/?.