For roughly the past year, JLF’s Jordan Roberts has been working with RIP Medical Debt to erase nearly $3 million in medical debt for North Carolina and South Carolina families. In his latest research brief, Roberts explains how this private philanthropy rescues low-income families from burdensome medical debts by purchasing them at a steep discount. Roberts explains:

RIP Medical Debt sponsors campaigns all around the country. They use private philanthropy to purchase portfolios of debt from the secondary debt market. Hospitals or debt collectors have usually sold this debt. At this point, RIP Medical Debt can use fundraised money to purchase old medical debt for pennies on the dollar. On average, every dollar they receive can be used to wipe out $100 in old medical debt. This is a significant return on investment as the dollars raised are stretched as far as possible to wipe out as much debt as possible.

To qualify, individuals have to meet three criteria:

  • Earn less than two-times the federal poverty level
  • Owe debts that are 5 percent or more of annual income
  • Owe debt that is greater than total assets

The individuals who qualify for this debt relief are those at the bottom of the income spectrum, that is, those who can least afford to pay their bills.

Roberts ran a highly successful campaign with RIP Medical Debt to wipe out medical debt across the Carolinas. Roberts writes:

When I first spoke to the representative from RIP Medical Debt, I told them that I wanted to raise money to wipe out debt for communities all across North Carolina and South Carolina. At that time, the representative told me there was around $2.8 million in eligible debt. Given this number, I set my goal at $30,000 to hopefully wipe out all of the eligible debt for the Carolinas.

…In early January, much to my surprise, I was notified that the Refuge Church in Kannapolis, NC, planned to donate $25,000 to my campaign. This church group does an annual end-of-year offering and chose to donate this year’s collection to my campaign. I am beyond grateful for the generosity of this congregation.

On my own, from fundraising around the state and proceeds from the event, I was able to raise another $6,740.  That brought the total to $31,220 for my North Carolina and South Carolina RIP Medical Debt fundraiser. This sum will wipe out upwards of $3 million in old medical debt held by those who need help the most.

Read the full brief here. Learn more about medical billing and the major factors that lead to high out-of-pocket costs here.