One problem here, as I see it, is that there is a significant difference between the mean adverse effects of all medical debt and the mean adverse effects of the types of medical debt that a debtholder is willing to sell for about a penny on the dollar:
For instance, presumably no one would sell debt on which they thought they could collect—e.g., by wage garnishment—at that price. Thus, it’s unlikely (e.g.) that debt of that type is a materially contributing factor toward bankruptcy for bankruptcy filers. Anyone who files bankruptcy over a debt that is known to be practically uncollectable up to the expiration of the statute of limitations probably needs a better bankruptcy attorney first and foremost.
Also, most debt that can be bought so cheaply is old enough that it’s less likely to be a significant factor in disrupting a provider-patient relationship. E.g., If the provider was going to fire the patient for non-payment, or the patient was going to terminate the relationship due to shame about owing the debt, it likely would have happened prior to that point.
I do think it could have a positive impact on people’s well-being though, especially since medical debt is linked to worse health outcomes. Medical debt also impacts people’s credit scores and overall financial well-being.
I think it’s likely to have positive effect, although I have significant uncertainty about the extent. The organization recently got a $50MM grant; hopefully the terms weren’t too restrictive and it can afford to fund some rigorous third-party research on the effectiveness of its programs. At least for an organization that has pulled in that much money, I think most EAs would want to see a randomized controlled trial of the effectiveness of this particular intervention before donating.
More generally, I’d be interested in a lobbying approach to this problem—reading the website, a fair amount of what the organization does seems to involve a moderately complex scheme to do debt relief without violating certain federal healthcare financing laws and insurance contracts. I can also think of a few ways to wipe or functionally wipe significant tranches of stale medical debt by legislative action that seem politically plausible on their face—e.g., writing some sort of auto-forgiveness provision into the Medicare terms of participation or restricting/forbidding collection activity under the FDCPA.
I agree, getting rid of medical debt is great but it doesn’t fix the underlying issue: unaffordable healthcare, especially for people with disabilities and chronic illnesses.
Some provisions in the affordable care act such as preventing insurers from not covering someone based on pre-existing conditions have helped reduce medical debt. Ideally, I would like to see a universal healthcare or a medicare for all type of model so that everyone can get the coverage that they need. There is a lot of data about how expanding medicare in different states has saved lives, resulted in less emergency room visits, etc.
One problem here, as I see it, is that there is a significant difference between the mean adverse effects of all medical debt and the mean adverse effects of the types of medical debt that a debtholder is willing to sell for about a penny on the dollar:
For instance, presumably no one would sell debt on which they thought they could collect—e.g., by wage garnishment—at that price. Thus, it’s unlikely (e.g.) that debt of that type is a materially contributing factor toward bankruptcy for bankruptcy filers. Anyone who files bankruptcy over a debt that is known to be practically uncollectable up to the expiration of the statute of limitations probably needs a better bankruptcy attorney first and foremost.
Also, most debt that can be bought so cheaply is old enough that it’s less likely to be a significant factor in disrupting a provider-patient relationship. E.g., If the provider was going to fire the patient for non-payment, or the patient was going to terminate the relationship due to shame about owing the debt, it likely would have happened prior to that point.
I do think it could have a positive impact on people’s well-being though, especially since medical debt is linked to worse health outcomes. Medical debt also impacts people’s credit scores and overall financial well-being.
I’m still reading into it but I found this: “Personal debt and financial hardship are strongly correlated with poor mental health, which can exacerbate adverse effects of other health conditions. A Consumer Financial Protection Bureau (CFPB) study found that medical debt worsens mental health conditions and is strongly correlated with increased chance of suicide. Many people who carry medical debt describe feelings of anguish and have higher rates of anxiety and depression. Medical studies have shown that poor mental health is a risk factor for chronic health conditions, and vice versa.”
I think it’s likely to have positive effect, although I have significant uncertainty about the extent. The organization recently got a $50MM grant; hopefully the terms weren’t too restrictive and it can afford to fund some rigorous third-party research on the effectiveness of its programs. At least for an organization that has pulled in that much money, I think most EAs would want to see a randomized controlled trial of the effectiveness of this particular intervention before donating.
More generally, I’d be interested in a lobbying approach to this problem—reading the website, a fair amount of what the organization does seems to involve a moderately complex scheme to do debt relief without violating certain federal healthcare financing laws and insurance contracts. I can also think of a few ways to wipe or functionally wipe significant tranches of stale medical debt by legislative action that seem politically plausible on their face—e.g., writing some sort of auto-forgiveness provision into the Medicare terms of participation or restricting/forbidding collection activity under the FDCPA.
I agree, getting rid of medical debt is great but it doesn’t fix the underlying issue: unaffordable healthcare, especially for people with disabilities and chronic illnesses.
Some provisions in the affordable care act such as preventing insurers from not covering someone based on pre-existing conditions have helped reduce medical debt. Ideally, I would like to see a universal healthcare or a medicare for all type of model so that everyone can get the coverage that they need. There is a lot of data about how expanding medicare in different states has saved lives, resulted in less emergency room visits, etc.