There’s an interesting trend in churches today that is designed to help struggling families pay their medical debt. You’ve probably seen the headlines—a church in Kansas eliminated $2.2 million, another in Illinois covered $4 million. Even a small church in Maryland paid off $1.9 million. It’s a movement that is picking up steam.
This is a good thing. Helping the poor should be a primary mission of the church. For most of my life, it has been a back-burner concern for the church, so it’s nice to see it given the attention it deserves. Or is it? What is this all about.
When a person has medical debts they can’t pay, they are cycled through a series of collection agencies. When a collector is unsuccessful, they will sell the debt to another collector at a reduced rate. This might happen a half a dozen times before it is finally considered a lost cause. All of this is after the original creditor has written off the amount as a loss.
All the while, the person who owes the debt must deal with harassing phone calls, angry letters, and threats to sue. As you can imagine, their credit is trashed as delinquencies are added to their report each month. By the time the collectors give up, the debtor has ruined credit and lost hope of ever paying it off.
Along comes one final attempt. An enterprising company swoops up the unpaid notes by paying pennies on the dollar. They then bundle it up and sell it in huge chunks. If you want to cancel a person’s debt, give this company $100, and they will wipe out a $10,000 note. In other words, the debts are being settled for 1% of the debt. I’m not sure, but I suspect the debt was reduced substantially before being sold off, so the reality is that it is far less than 1%.
Churches realize they can “help” hundreds of families by paying off millions of dollars in debt with a small amount of money. For every $10,000 raised, they can wipe out $1 million of debt. It sounds like a win/win. Everybody should be happy.
There are winners in this scenario. The companies that organize this whole thing are probably the biggest winner (check out www.ripmedicaldebt.org). The church garners great publicity and members feel good about themselves. Perhaps even the debtor might feel better getting rid of an albatross that was given up for dead years ago.
However, if the church really wants to help the poor, there is a much better way. The first and most obvious suggestion I could make is to stop fighting against every effort to make health care affordable. In case you don’t understand what I’m saying, you Republicans need to come up with a health care plan that benefits the poor instead of stonewalling every effort made by others. Many of you are in the church, so you should understand God’s concern for the poor.
A second suggestion is to assist the poor before their credit is trashed, and they are beaten down by collectors. Latch on to these folks when they leave the hospital, not after they’ve been struggling for years to pay the debts. Help them when your help is still valuable. It might not be as flashy, and it certainly won’t show up in newspaper headlines, but it will be more practical and helpful.
A third idea is to not give your money to an organization that is buying up this debt and selling it for a substantial profit but give the money directly to the people who need it. The Rip Medical Debt folks have a debt elimination counter on their website that is moving faster than the federal debt counter. I’m not an accountant, but the best I can tell by looking at their 2018 tax report, they purchased approximately $2.3 million of debt and raised $5.4 million in contributions. There’s money to be made somewhere in this.
I’m not suggesting this is a bad thing; it’s just not the best thing. It is encouraging to hear about churches expressing concern for the poor, but let’s make sure that it is true concern for the poor and not just a publicity stunt.