--:-- [Theme music fades out]
--:-- Noel King: Four in 10 Americans are burdened by medical debt, and we're coping however we can. People will cut spending on everyday items like food. They'll cut spending on rent. We certainly hear about people skipping medical services, you know, skipping prescriptions, not going to their annual checkups, not doing follow-up procedures or services because they're worried about the cost.
--:-- Noel King: Polling shows that unlike student debt, Americans are not that divided on how we feel about this. About 7 in 10 of us support some kind of relief. And organizations and individuals are providing that relief. Two former debt collectors were inspired to tackle the problem, and now their nonprofit, RIP Medical Debt, has wiped out more than $7 billion in debt.
--:-- Noel King: We thought, well, instead of collecting on the money, why not forgive it? Recently, some economists asked, how well is this working? We're going to tell you what they found coming up on Today Explained.
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--:-- Noel King: This is Today Explained. My name is Dylan Scott, and I am a senior correspondent and editor at Vox covering health.
--:-- Dylan Scott: Dylan, you recently wrote for Vox about medical debt relief. It's become a big thing because medical debt is a big thing. What does it look like? What's it entail? Who's doing it? Tell us everything.
--:-- Dylan Scott: So people might remember about a decade ago, the HBO host John Oliver got a bunch of media attention for buying about $15 million worth of medical debt. That was debt from about 9,000 people. Debt. It's the reason Nicolas Cage has made so many great choices in recent years.
--:-- Dylan Scott: And he just wiped it out. So are you ready to do this? You are about to watch me give away $15 million. F*** you, Oprah! There's a radio host in Nashville, Dave Ramsey. And that's why we wanted to take this opportunity to show the love of Jesus by taking on the debt of 8,000 people across the country.
--:-- Dylan Scott: A total of $10 million of debt. A couple of Christmases ago, he bought a bunch of people's medical debt and forgave it. We bought it, and it's forgiven.
--:-- Dylan Scott: There's a group out there. It used to be called RIP Medical Debt. It's now known as Undue Medical Debt. That has systematically been going around to debt collectors who have portfolios of medical debts in collections. and they can buy it for pennies on the dollar.
--:-- Dylan Scott: More than half of Americans say getting a bill they can't afford is as scary as a serious diagnosis itself. Our debt is harming us. But what if we could make that debt disappear?
--:-- Dylan Scott: Even some state and local governments have been proactive about this and have bought up the medical debt of distressed citizens and wiped it out for free.
--:-- Dylan Scott: I've seen these stories. I mean, I remember when John Oliver did this. I remember when Dave Ramsey did this. To me, this seems like a really good idea, a really generous thing to do.
--:-- Dylan Scott: And yet, we would not be here talking to you today, I think, if all of this was going exactly as planned. How is medical debt forgiveness working broadly?
--:-- Dylan Scott: I had the same assumption that you did. And like I've said, I think this is what made medical debt relief really attractive was, here, we can do this really cheaply. It's going to wipe debt out for people. Certainly that has to be a good thing, right?
--:-- Dylan Scott: But there is this new study that's been conducted that has called the value of medical debt relief into question.
--:-- Dylan Scott: so basically there's this group of researchers they're from a number of places Stanford, Harvard, University of Munich actually, UCLA, and they basically partnered with RIP Medical Debt or now Undue Medical Debt to run an experiment.
--:-- Dylan Scott: And what they did was there was this big group of people they buy up these massive debt portfolios and for really cheap and buy them off so we had both people who had their debt relieved, people who didn't, people who had had debt for a long time, people who had had it for a short time.
--:-- Dylan Scott: As insurers work to control health care costs, patients increasingly face high copays and deductibles. For the majority of working Americans who live paycheck to paycheck, out-of-pocket costs come at a time they can least afford it.
--:-- Dylan Scott: And the researchers wanted to see, like, okay, what does this do for people? Are they happier? Are they healthier? Does their credit score improve? Do they just subjectively feel happier, feel more able to cover their bills, things like that.
--:-- Dylan Scott: And obviously, everybody expected that we would see these really positive results. We've seen from other kinds of debt relief, whether it's student loans or relief for credit card debt or things like that, that receiving debt relief does lead to these positive financial and health outcomes.
--:-- Dylan Scott: But what was shocking about this analysis of medical debt relief was that none of those positive outcomes actually materialized.
--:-- Dylan Scott: There was not really a meaningful change to people's financial situation, their access to credit, and there really wasn't any meaningful change to their mental or physical health.
--:-- Dylan Scott: There was if anything there was actually some evidence that some people felt more depressed after receiving medical debt relief than they had felt before.
--:-- Dylan Scott: Why? Researchers had a couple of different theories about why this might be.
--:-- Dylan Scott: For one, you know, the relief did come pretty long after the fact. They had been carrying their medical debt for like seven years.
--:-- Dylan Scott: You know, as one of the researchers put it to me, they've already felt the scars of the debt collection process. They've been hounded by debt collectors. Maybe they've had to cut spending on other things like that.
--:-- Dylan Scott: That pain has already been felt, and so providing relief for it later maybe isn't making that much of a difference for people.
--:-- Dylan Scott: On top of that, you know, the people who received medical debt through this experiment, they didn't actually ask for it.
--:-- Dylan Scott: And that's the way that RIP Medical Debt's model works. Like, they very explicitly do not accept, like, specific requests for debt relief, and yet they received it anyway.
--:-- Dylan Scott: And why we might think that they would just be like, well, that's great. Now I don't have this medical debt. There is a fair amount of research that shows that Americans, they often feel like shame if they receive charitable aid or relief from the government.
--:-- Dylan Scott: And there's a stigma that's associated with receiving that kind of assistance. And so, you know, as one of the researchers put it to me, like, when we're conducting these surveys and calling these people and saying like, hey, you've received medical debt relief, you know, tell us how it's felt or how it's affecting your finances.
--:-- Dylan Scott: We're both reminding them of this really, you know, potentially traumatic experience where they had these medical debts and were being hounded by debt collectors.
--:-- Dylan Scott: You know, we're maybe introducing an opening for that shame or that stigma to creep in.
--:-- Dylan Scott: All right. So the study found that people felt worse. They were more depressed, at least some significant number of people. Their mental health did not improve.
--:-- Dylan Scott: Did their finances improve, though? This was the other thing. Not really.
--:-- Dylan Scott: On average, there was a pretty negligible increase in credit scores a couple of points.
--:-- Dylan Scott: There was a pretty marginal increase in their credit limits, a couple of hundred dollars, but not like the dramatic improvements that we might hope to see.
--:-- Dylan Scott: And like on average, the folks who were involved in the experiment, they're carrying about $28,000 in debt.
--:-- Dylan Scott: And the average amount of relief that they received through the experiment was a little more than $2,000.
--:-- Dylan Scott: So like, yeah, that's a meaningful amount of assistance. But at the same time, it's not like it's completely changing your financial situation.
--:-- Dylan Scott: The one exception is there was a subgroup of people whose only debts were medical debts. And so basically, through this experiment, all of their debts were wiped out.
--:-- Dylan Scott: And they had a slightly larger improvement in like their credit score or credit access.
--:-- Dylan Scott: Does this mean that this way of relieving medical debt just does not work?
--:-- Dylan Scott: So I would say, and I think the researchers would say, and I certainly know groups like Undue Medical Debt would say, that it's premature to just write off medical debt entirely because of one study.
--:-- Dylan Scott: But the findings were they were sobering, they were surprising, And I do think they've raised questions about what are the limits of medical debt relief.
--:-- Dylan Scott: Clearly, it's not going to turn people's lives around, especially if we're providing it years after the fact.
--:-- Dylan Scott: And it's certainly not going to improve their credit scores, although that's an increasingly moot point because most of the credit rating agencies have agreed to stop reporting medical debt after urging from the Biden administration.
--:-- Dylan Scott: This affects about 100 million Americans who have some sort of medical debt. That's according to the Biden administration.
--:-- Dylan Scott: And in some cases, it can prohibit them from getting a loan to buy a home or even a cell phone.
--:-- Dylan Scott: So this would essentially remove that from your life unless you're looking to get another kind of medical loan.
--:-- Dylan Scott: And so I think that conversation has really taken off since this study came out.
--:-- Dylan Scott: And so it's better for us to have this information to sort of be able to digest it and confront it and then think about how it might change our approach.
--:-- Dylan Scott: Damn. Where might our energy be better focused? It seems to me preventing this kind of debt from piling up in the first place, right? This many people to this degree. How are we doing that, Dylan?
--:-- Dylan Scott: Yeah, so that brings us back to the whole problem, right? We were trying out medical debt relief because it's easier than overhauling the U.S. healthcare system.
--:-- Dylan Scott: And that could take a couple of different forms. It certainly could involve providing more health insurance to people, covering people who are uninsured, providing more generous benefits to the people who do have coverage.
--:-- Dylan Scott: There's Medicaid expansion that could be done under the Affordable Care Act, but a bunch of states in the Deep South haven't done it.
--:-- Dylan Scott: And that's left like a million people without any accessible insurance options.
--:-- Dylan Scott: So that's like low-hanging fruit that we could take. It's just politically difficult.
--:-- Dylan Scott: But we do have a lot of evidence that giving people health insurance does have the positive mental, physical, and financial effects that we were hoping to see with medical debt relief.
--:-- Dylan Scott: About 15 years ago, there was this big experiment in Oregon. And basically, it's called the Oregon Health Insurance Experiment.
--:-- Dylan Scott: If people want to look it up, it has become a totemic work in healthcare research. You see it referenced all the time.
--:-- Dylan Scott: And what was happening in Oregon back then was they basically had a lottery that allowed certain people to get on Medicaid for the first time.
--:-- Dylan Scott: So we used that draw from the waiting list as a chance to figure out what does Medicaid do to health care use? What does Medicaid do to health outcomes?
--:-- Dylan Scott: And the results showed that among low-income adults who received Medicaid through the Oregon health insurance experiment, they saw a 9% reduction in depression.
--:-- Dylan Scott: Like we saw all the things that we hope to see happen by giving people Medicaid that didn't happen with medical debt relief.
--:-- Dylan Scott: So if we want to help and we can't really do anything about Medicaid, what do we do? What are the options?
--:-- Dylan Scott: Well, I think people are finding that they don't have a lot of good options.
--:-- Dylan Scott: And so they're turning to their fellow Americans, to their neighbors, to people that they know, or even to strangers on the Internet for help.
--:-- Dylan Scott: You've seen a dramatic rise in the last decade, I feel like, of people using websites like GoFundMe or other crowdsourcing options and saying like, hey, I had a medical emergency. I have tens of thousands of dollars in medical bills. Will you please help me?
--:-- Noel King: Coming up next when GoFundMe turns into GoFundYourself.
--:-- Noel King: Support for Today Explained comes from Built Rewards.
--:-- Noel King: These days, it seems like everybody has a rewards program. You swipe your card and you get one cent on the hundred dollars. But with your rent, frequently you just pay month after month. You never get anything from it other than that roof over your head.
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--:-- Noel King: No generic answers. No frustration. Visit sierra.ai to learn more.
--:-- Noel King: Support for the show today comes from LifeKit, the podcast from NPR.
--:-- Noel King: What's in your life kit? I'm asking. They didn't ask that.
--:-- Noel King: Every day you have to make choices that might shape the direction of your life, but you can't flip to the back of the book to find an answer key.
--:-- Noel King: Instead, you can listen to the LifeKit podcast from NPR. Life Kit offers real stories about common issues like relationships, finances, parenting, and your career.
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--:-- Noel King: My name is Nora Kenworthy, and I'm an associate professor at the University of Washington Bothell.
--:-- Nora Kenworthy: and I'm the author of a new book called Crowded Out, The True Costs of Crowdfunding Healthcare.
--:-- Nora Kenworthy: How did you come to write about crowdfunding healthcare?
--:-- Nora Kenworthy: Well, my background is in public health and anthropology, and I'm really interested in sort of how people come into medical systems and how they get treated there.
--:-- Nora Kenworthy: And quite honestly, I stumbled across GoFundMe many, many years ago, back when it was a site where people printed off little flyers for their campaigns and hung them on light poles.
--:-- Nora Kenworthy: And I was just fascinated.
--:-- Nora Kenworthy: And I was noticing how many campaigns on the site, even back then, were for medical needs.
--:-- Nora Kenworthy: What year was that, that people were printing the flyers off of GoFundMe? Like 2013, 2014, so a couple years after the platform launched.
--:-- Nora Kenworthy: Okay, so the platform launches, and within a couple of years, people are using it for this one specific need.
--:-- Nora Kenworthy: And so you decided to look into what's going on, why it's going on. Tell me about the types of stories that you heard from people who were using GoFundMe or other crowdfunding platforms to deal with medical debt.
--:-- Nora Kenworthy: Yeah, I mean, there's so many stories, but I think we tend to hear stories of platforms like GoFundMe about very popular or very successful campaigns.
--:-- Nora Kenworthy: You know, someone goes viral and gets tens of thousands of dollars and they're set, their problem is solved.
--:-- Nora Kenworthy: Parks had the treatment, is back to work, and is now approaching nine months cancer-free.
--:-- Nora Kenworthy: And GoFundMe worked for me. And I know it works for a number of other people.
--:-- Nora Kenworthy: But most of the people that I spoke to had much more mixed experiences.
--:-- Nora Kenworthy: So I talked to a young guy named Diego, whose family is a family of farmers in eastern Washington.
--:-- Nora Kenworthy: And his cousin was in a terrible car accident in a coma.
--:-- Nora Kenworthy: And he set up a campaign for her because he was worried.
--:-- Nora Kenworthy: He said his uncle was telling him that he would be in debt for life over these bills.
--:-- Nora Kenworthy: And he set up a campaign.
--:-- Nora Kenworthy: And while he felt like the campaign helped, you know, they only raised $1,200.
--:-- Nora Kenworthy: Meanwhile, his cousin was in ICU for months at a time, racking up truly enormous medical bills.
--:-- Nora Kenworthy: So in a case like Diego's, you're telling me ICU for months, we have to be talking about tens of thousands, right?
--:-- Nora Kenworthy: Yes, if not hundreds of thousands.
--:-- Nora Kenworthy: You know, I talked to other people who had campaigns that were sort of similar to Diego's.
--:-- Nora Kenworthy: I can't pay my dentist bill anymore. I can't afford food. My rent, my car. I won't be able to work as much due to knowing how the chemo is going to make me feel.
--:-- Nora Kenworthy: If you could please help me out with paying for this, it would be greatly appreciated due to how I'm trying to save up to go to college for this next winter.
--:-- Nora Kenworthy: And so they're still facing these incredibly large bills that are coming due.
--:-- Nora Kenworthy: I think the other thing that we don't see on the kind of surface level of crowdfunding is just how many people are actually very unsuccessful with crowdfunding.
--:-- Nora Kenworthy: So in 2020, about a third of medical campaigns that we were able to find on the platform GoFundMe actually got zero dollars whatsoever.
--:-- Nora Kenworthy: A third of them didn't raise anything.
--:-- Nora Kenworthy: Anything, yeah.
--:-- Nora Kenworthy: Did you talk to anyone for whom it was an unqualified success? They asked for a certain amount, they got the certain amount, they're fine now?
--:-- Nora Kenworthy: Yeah, yeah, totally.
--:-- Nora Kenworthy: I, for example, talked to one couple that the husband needed a kidney transplant.
--:-- Nora Kenworthy: Most people don't know this but actually crowdfunding for transplants has long been a thing in the U.S. because the cost of transplants is so expensive.
--:-- Nora Kenworthy: And there's not a lot of programs that will help you pay for them.
--:-- Nora Kenworthy: So they crowdfunded for his transplant.
--:-- Nora Kenworthy: And then they found out that actually his wife could be a donor through a donor match program.
--:-- Nora Kenworthy: And so then they needed to crowdfund for her transplant.
--:-- Nora Kenworthy: And they did.
--:-- Nora Kenworthy: They did both.
--:-- Nora Kenworthy: But they also talked about the long-term costs of their illness.
--:-- Nora Kenworthy: They talked about how much of a burden it put on their families to have to do these two huge crowdfunding campaigns.
--:-- Nora Kenworthy: And they talked about the fact that, like, they couldn't possibly crowdfund a third time if anything should happen again.
--:-- Nora Kenworthy: So I think there's just a lot of stories out there of how crowdfunding, even when it's successful, can be a challenge.
--:-- Nora Kenworthy: We are trying to get a new heart for our cousin. I have the opportunity to seek a dual kidney and partial pancreas transplant with Methodist Hospital in Dallas.
--:-- Nora Kenworthy: Unfortunately, this operation is very expensive.
--:-- Nora Kenworthy: Even with Medicare, my copay would be over $50,000.
--:-- Nora Kenworthy: To officially be placed on the transplant list, I need to raise $10,000.
--:-- Nora Kenworthy: It sounds like what you're saying is crowdfunding for medical debt is not working for the most part.
--:-- Nora Kenworthy: It does make people feel better about themselves.
--:-- Nora Kenworthy: I've been part of medical crowdfunding campaigns. I was very happy to do it.
--:-- Nora Kenworthy: Is there anything wrong with this?
--:-- Nora Kenworthy: Yeah, these are really hard things to discuss, right? Because, of course, we want to help people.
--:-- Nora Kenworthy: Of course, we want to be generous with our friends and our family, and I don't fault anyone for either giving to a campaign or needing a campaign.
--:-- Nora Kenworthy: And there are certainly times and places where these campaigns provide really meaningful support to people.
--:-- Nora Kenworthy: What's hidden beneath the surface, though, is that these campaigns tend to provide the most benefit to the people who need help the least.
--:-- Nora Kenworthy: So what we find time and time again is that the most privileged people who turn to crowdfunding are the ones who do the best.
--:-- Nora Kenworthy: Mary Lou Retton's family is asking for prayers this morning after turning to crowdfunding for what could be a lengthy and expensive hospital stay for the former gymnast.
--:-- Nora Kenworthy: As of this hour, the spot fund for Mary Lou's medical expenses has raised over $280,000 of its original $50,000 goal.
--:-- Nora Kenworthy: goal.
--:-- Nora Kenworthy: Her treatment is continuing.
--:-- Nora Kenworthy: What, at the end of your book and at the end of the day, do you think that people with medical debt should do?
--:-- Nora Kenworthy: I think that what we're all responding to is a recognition of the brokenness of our systems, right? That, like, how is it possible that we're reduced to this and yet sort of also caught up in the feel-good collective action of helping one person.
--:-- Nora Kenworthy: And so I think that because a lot of times we feel so powerless about the broader systems that have eroded our social safety nets and our health coverage and thrust us into medical debt, we hold on to these stories of one person's hope or one person's problems being solved.
--:-- Nora Kenworthy: And I think that that can be a really profound distraction from some of the other things that we could be doing in order to change things.
--:-- Nora Kenworthy: One of the more powerful arguments of organizations like the Debt Collective is first that debt itself is fundamentally unfair, especially medical debt.
--:-- Nora Kenworthy: Most people didn't ask for it. They didn't agree to it. They may not have even known the price of things when they went in for care.
--:-- Nora Kenworthy: But secondly, they also quote from capitalist John Paul Getty to remind us that debtors actually have power, so that if you owe the bank $100, it's your problem, But if you owe the bank $100 million, it's the bank's problem.
--:-- Nora Kenworthy: And in this case, organizing debtors to express their power and to express how unfair these debts are is working.
--:-- Nora Kenworthy: You know, Americans are estimated to owe the bank essentially $220 billion in medical debt.
--:-- Nora Kenworthy: That does have power.
--:-- Nora Kenworthy: But also this is a problem that we need to solve systemically and politically.
--:-- Nora Kenworthy: And so I think we got to figure out how we can reorganize each other around the idea that everyone is entitled to a certain amount of basic medical care.
--:-- Nora Kenworthy: And one of the things that really concerns me about crowdfunding is it erodes our sense of that collective duty, right?
--:-- Nora Kenworthy: So as much as it feels good for all of us to contribute to like one person, you know, who's homeless or who walks to and from work, what crowdfunding is also inculcating us with is the idea that we get to pick and choose.
--:-- Nora Kenworthy: We get to pick and choose who gets help and who gets rescued.
--:-- Nora Kenworthy: And that is completely antithetical to the kind of moral architecture of a more universal health care system where people get care even if they make bad choices or regardless of the color of their skin or how much money is in their bank account.
--:-- Noel King: The book is Crowded Out, the true cost of crowdfunding health care.
--:-- Noel King: Denise Guerra and Avishai Artsy produced today's show.
--:-- Noel King: Welcome, Denise.
--:-- Noel King: Amina El-Sadi edited.
--:-- Noel King: We were fact-checked by Matthew Collette and Laura Bullard.
--:-- Noel King: And Patrick Boyd is our engineer.
--:-- Noel King: I'm Noelle King.
--:-- Noel King: It's Today Explained.
--:-- Noel King: Support for the show comes from Mercury.
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