Donors erase $10 million medical debt in Central Appalachia

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A nonprofit organization called RIP Medical Debt has paid off $10 million in medical debt for more than 10,000 people in mainly rural Appalachian counties of Kentucky, Virginia and West Virginia. The donations will wipe out most of the currently reported medical debt in the region. "The donations total $100,000, but paid off much more debt because the organization purchased the debts for pennies on the dollar on the debt market," Tim Marema reports for The Daily Yonder.

Jim and Sharen Branscome on Columbia Glacier in Canada

"The debt forgiveness was paid with donations from two families with ties to Central Appalachia: Jim and Sharen Branscome and Bill Bishop and Julie Ardery," $80,000 and $20,000, respectively, Marema reports. "Jim Branscome is a native of Southwest Virginia. He and Sharen Branscome met when they both worked for the Appalachian Regional Commission in Washington, D.C. Bishop and Ardery are from Kentucky."

Jim Branscome, of Montrose, Colo., and Bishop, of LaGrange, Texas, worked for The Mountain Eagle, the crusading weekly newspaper in Whitesburg, Ky., in the 1970s. Marema notes both families have donated to the Yonder; Bishop and Ardery are the founding editors.

Julie Ardery and Bill Bishop

Branscome and Bishop are on the advisory board of the Institute for Rural Journalism and Community Issues, which publishes The Rural Blog, and Bishop and Ardery were the 2014 winners of the institute's Al Smith Award for public service through community journalism by Kentuckians. Bishop is the author of The Big Sort: Why the Clustering of Like-Minded America is Tearing Us Apart, a 2008 book that remains current; Branscome was managing director of equity research for Standard and Poor's when it was part of McGraw-Hill.

RIP Medical Debt was founded in 2014 by some veterans of the debt-collection industry. Medical providers and others sell debts at deep discounts in hopes of getting back a portion of what they're owed. "When RIP Medical Debt purchases the debt, instead of attempting to make collections, they forgive it," Marema reports. "The organization sends notifications to the affected individuals and reports the erasure to credit bureaus, which improves credit scores."

About 300,000 people have had a combined debt of $800 million forgiven through the organization; the average person has $2,600 of debt forgiven. One of its founders, Craig Antico, "said the forgiveness can have special benefits for rural consumers, where there are fewer medical-care choices and those with insurance may be more likely to face out-of-network expenses," Marema reports. "Uninsured patients are another major source of medical debt. Medical debt contributes to 60 percent of all individual bankruptcies and can reduce access to health care, he said."