Heard on Morning Edition – Underscoring the massive scale of America’s medical debt problem, a nonprofit has struck a deal to pay off old medical bills for an estimated 20 million people.
New York-based Undue Medical Debt, which buys patient debt, is paying off $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 Undue Medical Debt, with some reaching the hundreds of thousands of dollars.
The deal will prevent the debt being sold and protect millions of people nationwide from being targeted by collectors, though this will overwhelmingly benefit residents of Texas and Florida, who account for about half of the debts being retired.
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Despite the size of this deal, however, even proponents of retiring patient debt acknowledge that such purchases cannot solve a crisis that now touches around 100 million people in the U.S.
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“We don’t think that the way we finance health care is sustainable,” Undue Medical Debt chief executive Allison Sesso said. “Medical debt has unreasonable expectations…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 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 bills that aren’t covered by their health insurance.
Pendrick’s chief executive, Chris Eastman, declined several requests to be interviewed about the debt sale, which has not been previously reported.
But Eastman acknowledged in a 2024 podcast episode that collecting medical debts has grown more challenging …
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