Experts partnered with RIP Medical Debt, a medical non-profit that buys and forgives debt, found it had little effect on people’s credit scores and mental health
Medical debt is the most common form of debt in collections in the US. But forgiving that debt once it has gone to collections may provide fewer health and financial benefits than once hoped.
A new study by researchers who partnered with RIP Medical Debt, a non-profit that buys and forgives medical debt, found “disappointing” results when people’s bills were purchased and forgiven, with little impact on people’s credit scores and willingness to go to the doctor.
“Our hope was that this would be a cost effective intervention,” said Raymond Kluender, lead author on the National Bureau of Economic Research (NBER) report which partnered with RIP Medical Debt, and an assistant professor of business administration at Harvard Business School.
“We find no real benefits on people’s household finances or their mental health or utilization of healthcare in our study,” Kluender said.
However, he added, he doesn’t “think any of the authors on the project would not say medical debt is not a huge issue”. Instead, Kluender said, “Our interpretation is you have to intervene upstream,” which essentially means it might be more effective to provide people with financial assistance or universal, affordable healthcare – the sort that might prevent bills from accumulating – rather than forgive one bill at a time.
I’m dealing with it right now. I’m two months behind on one credit card. They have already reported it to the credit bureaus, and a second credit card (which I am still current on) reduced my available credit the same day the delinquency showed up on my report. Additionally, the credit card I’m behind on happened to also be where I have a checking account. They took every last penny out of that account “to apply it to the credit card” (less than $100).
I have never been late on anything in my life and have never overdrawn my bank account either.
Also, before I started getting behind on things I had a hospital bill that I’ve been paying on for over a year, always on time and as per mutual agreement. They called me a few months ago and said they were sending it to collections. Basically they didn’t like how long it was taking to pay off. (but if they didn’t want it to take that long then why did they agree to a low payment? Do they not have calculators?)
Anyway I was feeling pretty bad about this stuff but then I remembered that I did everything “right” and never got any grace from them, so now my only regret is paying these bills for so long when I could have used that money elsewhere.