Underscoring the massive scale of America’s medical debt problem, a New York-based nonprofit has struck a deal to pay off old medical bills for an estimated 20 million people.
Undue Medical Debt, which buys patient debt, is retiring $30 billion worth of unpaid bills in a single transaction with Pendrick Capital Partners, a Virginia-based debt trading company. The average patient debt being retired is $1,100, according to the nonprofit, with some reaching the hundreds of thousands of dollars.
The deal will prevent the debt being sold and protect millions of people from being targeted by collectors. But even proponents of retiring patient debt acknowledge that these deals cannot solve a crisis that now touches around 100 million people in the U.S.
“We don’t think that the way we finance health care is sustainable,” Undue Medical Debt chief executive Allison Sesso said in an interview with KFF Health News. “Medical debt has unreasonable expectations,” she said. “The people who owe the debts can’t pay.”
In the past year alone, Americans borrowed an estimated $74 billion to pay for health care, a nationwide West Health-Gallup survey found. And even those who benefit from Undue’s debt relief may have other medical debt that won’t be relieved.
This large purchase also highlights the challenges that debt collectors, hospitals, and other health care providers face as patients rack up big bi …