It was a heartwarming story, something akin to the works of Charles Dickens or Frank Capra. During the Christmas season of 2012, 44 unsuspecting New Yorkers found a package with red wrapping paper in the mail informing them that their medical debts had been forgiven.
No doubt many of the recipients did not at first believe it. Was this some sort of prank or scam? Many owed thousands of dollars to local hospitals, debts that they, like millions of Americans, could not hope to repay. But this was no scam; the debts had been purchased by a small band of debt abolitionists who aimed to show that such debts could, and should, be canceled. Today, similar medical debt forgiveness drives are taking place in communities around the country. Churches, students, and even municipal governments are buying and forgiving the medical bills of local debtors.
But some of the radical hope of that first campaign has worn off. In fact, many of the very people who organized what they called a “Rolling Jubilee”—a reference to the biblical Jubilee, a moment of social renewal that included the cancellation of debts—now decry the persistence of privately-funded medical debt forgiveness campaigns. It is not, they claim, nearly enough.
The idea to buy and cancel debts was conceived in 2012 by Strike Debt, a group of writers, artists and other activists that grew out of the Occupy Wall Street movement. The Occupy gatherings had been awash in debtors. Americans underwater on their home mortgages or burdened by student loan or car loan or credit card payments spoke about the ways that debt was running—and ruining—their lives. After Mayor Bloomberg and other city leaders across the country used police to sweep away the camps from public squares, the members of Strike Debt continued to meet to plot a way forward. They saw the existing system of consumer debt as a tool to keep people locked in soul-deadening jobs providing services to the wealthy few.
One member of the group, a sculptor named Thomas Gokey, had read about markets where traders bought and sold the medical debts of patients. There, buyers secured the right to collect debts, often by draconian means, including lawsuits resulting in wage garnishments, property liens, and even home foreclosure. Gokey proposed that Strike Debt buy this debt and—instead of trying to collect on it like every other buyer—cancel it, essentially tearing up the paper and telling the debtors that no one could ever ask them to repay it. The group was taken with this idea, not because it was a solution to the problem of medical debt—they knew they would only help a tiny portion of medical debtors, and people would continue to fall into debt anew after hospital stays or ER visits. But this cancellation would, in the words of writer and documentarian Astra Taylor and fellow organizer Andrew Ross, expose “the seedy underbelly of the debt system and the inequities it perpetuates” while allowing the group “a chance to offer others support and solidarity where the government has failed them.”
Convincing the group was the easy part, as buying medical debt was not a simple task. This was a market built on personal connections, and when Gokey took to online message boards to ask debt brokers to sell him medical debt, he was initially rebuffed. Eventually, through begging, cajoling, and persistence, he was able to make a small purchase of $500 for medical debt worth $14,000 in face value. Still, Strike Debt knew that if they wanted to make bigger buys, they needed an insider, someone the debt brokers would trust. The group found such an insider in Jerry Ashton, a longtime debt collector who had been inspired by Occupy Wall Street. When Gokey, Taylor, Ross and others approached Ashton with their idea to buy and forgive medical debt in a modern-day Jubilee, he agreed to help. Using the $600,000 Strike Debt had raised in a telethon held in a Manhattan nightclub, Ashton and Craig Antico, another experienced collector, used their connections to purchase much larger amounts of medical debt. Together the group then mailed out the Christmas-themed packages containing cards announcing the cancellation to all those whose debts they had bought. Over the next year, they would forgive the medical debt of thousands of people across the country.
To the members of Strike Debt, this was to be an opening salvo in a broader struggle against an economic system built on unjust consumer debts. Their work would be focused on organizing debtors harmed by predatory lenders and the commodification of public goods like healthcare and education. In the next decade, Strike Debt organized a successful campaign for debt cancellation alongside students at for-profit colleges and helped to convince President Biden to propose student debt cancellation for tens of millions of Americans. Today, Taylor and Gokey and other members of Strike Debt have even broader aims, including organizing unions of debtors around the country “to build a world where college is publicly funded, healthcare is universal, and housing is guaranteed for all.”
But to Ashton and Antico, the joy of bringing immediate relief to so many people in debt was a revelation. “We were hooked,” Ashton recalled in an interview I conducted for my book. “We read the letters [from people whose debts had been forgiven]. We knew the impact we had.” In 2014, the pair went on to found RIP Medical Debt, a charitable organization that uses donated funds and consumer data from the credit reporting agency TransUnion to purchase and forgive the medical debts of low-income Americans. Over the last decade, RIP Medical Debt has forgiven over $9 billion in medical debt. When, in 2016, the producers of John Oliver’s HBO show Last Week Tonight aimed to “out-Oprah Oprah” by staging the biggest one-time TV giveaway of all time (even bigger than Oprah’s famous “Everybody gets a car!” moment from 2004), they turned to Ashton and Antico to help them purchase and forgive $15 million in medical debt.
Thanks in part to the publicity from Oliver’s show, the approach has spread like wildfire. Churches and students organize drives to forgive the debts of people in their area, and RIP Medical Debt helps locate unpaid bills held by people in their neighborhoods. Today, using COVID-era funds provided to local governments in the American Rescue Plan Act of 2021, cities and counties such as Cook County in Illinois and Toledo, Ohio, are working with RIP Medical debt to pay off the medical debts of their citizens.
How can you not feel good about these stories? These days, Astra Taylor doesn’t. “There is a problem with subsidizing this industry. We don’t want to be raising funds and then basically buying the portfolios of debt collectors,” she explained. Taylor never believed buying debt was a satisfactory answer. It was “a spark—not the solution,” she argued in The Nation in 2012. She readily acknowledged critiques of the buying-and-forgiving approach, including one by Yves Smith, who writes about finance on her blog Naked Capitalism. Smith argued there should be an “instinctive revulsion to a plan that perpetuates and enriches the participants in abusive practices. I don’t think you’d see such enthusiasm, say, for a plan to deal with trafficking in women by raising funds to buy a few of the victims from the sex slave traders and free them. But the economic relationship to a predatory system is similar.”
Ultimately, debt forgiveness drives like RIP Medical Debt enrich the debt collectors themselves, fueling the revenues of an industry built on extracting the meager funds of the destitute sick. Paying collectors for debt so that it can be forgiven is akin to paying a ransom. The victim might be set free, but the kidnapper still comes out ahead.
While acknowledging this conundrum, Taylor has long believed the function of the initial debt purchases was to open people’s eyes to possibilities beyond perpetual debt bondage; she has sought to “move people to the next level of engagement instead of doing this trick over and over again,” as she said in 2021 on the Current Affairs podcast. John Oliver himself seemed to get the point. As he announced the debt forgiveness on air, he marveled at the very existence of “this debt that I cannot fucking believe we are allowed to own.”
These critics of debt forgiveness point out that it makes the debt collector’s work even more profitable. Medical collection is challenging because most debtors simply cannot pay. An analysis of 2018 Census Bureau survey data found that 79 percent of medical debt is held by American households with zero or negative net worth. While some people can be bullied into paying off their debts with credit cards, most know that they simply cannot afford to pay, and so they don’t, even when it means that the debt collectors could ruin their credit scores or take them to court. Huge dollar amounts of face value of medical debt can be purchased for so little (the $15 million in debt purchased by Oliver’s show cost just $60,000, less than a half-penny on the dollar) because the total amount of debt is unlikely to ever be collected. Even the most aggressive debt collectors often cannot collect much of the debt they buy, as debtors tend to live in financial precarity. When RIP Medical Debt buys these debts, then, it is saving collectors the cost of the legwork of trying to receive payment on these often uncollectible debts.
Debt collection is an industry that has been neither neutral nor benign in the long twilight struggle over the right to healthcare in America. Its nature is not entirely clear to the casual observer, for seasoned industry professionals tend to cloak their work in obscure language. After critical press, including scathing attention from John Oliver, the Debt Buyers Association (a trade group that lobbies for the interests of debt buying companies) renamed itself the Receivables Management Association. The trade group representing debt collection agencies in Washington, D.C., was founded in 1939 as the American Collectors Association but today it calls itself ACA International. Industry documents intended for public consumption refer to their work not as debt collection, debt buying, or litigation, but as “revenue cycle management.” In their advocacy, debt collectors try to portray their purpose as a service to healthcare providers and even to patients. For instance, in one online advocacy statement, ACA International argued that reporting medical debt to credit bureaus should not be curtailed through proposed new federal laws or regulations. While consumer rights advocates and the Consumer Financial Protection Bureau have long claimed this practice does undue harm to patients’ credit reports, preventing many Americans from owning homes or even getting jobs that require solid credit, ACA International counters that “credit reporting can be the best way to alert consumers of their outstanding debts.” Lowering a debtor’s credit scores is, in their telling, a favor to debtors.
Debt collection firms are less likely to be coy about their work when they market their services to hospitals. One debt litigation firm, Account Recovery Services (which I learned about because they filed lawsuits against patients on behalf of the hospital where I completed my emergency medicine residency training), promises on its website that the firm’s legal staff “brings decades of experience in debt collections litigation to bear swiftly and effectively when needed.” This was no false boast: when I searched local court records, I found the firm had sued single mothers, people living on fixed incomes, and other vulnerable patients. “I am a full-time student and did not have medical [insurance] at the time,” wrote one defendant in the suit. “I am on social security disability and already spend $200 a month on medical expenses,” wrote another. The real work of debt collection is visible in overseas call centers, in small claims courts filled with patients, and in earnings calls touting aggressive debt collection tactics.
Recognizing the contradiction between its intent to relieve debt and its effect of enriching debt collectors, RIP Medical Debt has attempted a shift. Now, whenever possible, the group tries to purchase debt directly from hospitals instead of from third-party buyers. Though this does cut out one profit-seeking middleman from a charitable endeavor, it still absolves hospitals of one of their historic responsibilities. Non-profit hospitals, which account for the majority of community hospitals in the United States, justify their tax-exempt status in large part on the basis of their provision of financial assistance (also known as charity care) to low-income patients. But they do a poor job of it: though these hospitals are now required by law to have financial assistance policies, they are, for the most part, free to offer as little as they would like. Many hospitals take advantage of this freedom by imposing stringent income criteria, requiring onerous applications, and attempting to convince patients to pay up front even when they qualify for free care. Three-quarters of nonprofit hospitals spend less on community benefit programs like charity care than they receive in tax breaks. RIP Medical Debt’s new approach may not subsidize debt buyers, but it does fill the coffers of palatial hospitals with high-paid executives (the top 10 highest paid executives at nonprofit health systems each made at least $7 million in 2017) who are not doing nearly enough to keep their patients from going into debt in the first place.
Still, it is hard to deny the imperative to relieve suffering in the here and now, even in the absence of broader social and political transformation. Time and again, the harms of medical debt have been demonstrated: medical debt leads Americans to rack up credit card debt, to go bankrupt, to delay or forgo lifesaving procedures, and to distrust the healthcare system. It drives people to the most desperate of acts, even suicide. Ashton and Antico were understandably touched when they received letters from people who found, to their shock and relief, that their debts were no more. One recent note, posted on RIP Medical Debt’s website, highlights what a difference the debt relief can make: “As a single parent, I’ve done everything I can to stay away from debt. Hopefully with this relief my credit score will go up and we can finally get our own place. Thank you!”
But this mode of debt forgiveness is not, in its current incarnation, revolutionary. Fundraisers who forgive medical debt do undeniable good for the people they benefit, but they also help to perpetuate a system of profound injustice. Initially, the idea of buying and canceling debt was intended to highlight the absurd and horrific fact that one can trade in human misery through the sale of debt incurred through the misfortune of falling ill. But today, debt forgiveness has been institutionalized. It funds the work of debt collection while functioning as a salve over the festering wound that is our present system of healthcare financing. As Astra Taylor often points out, even the very notion of “forgiveness” implies that the debtors have done something immoral, that the ultimate fault lies with them instead of in the institutions seeking to exact money from them or in the broader social structure that makes this reality seem normal.
This is not to say that debt forgiveness—or, as Taylor and others prefer, cancellation—cannot be a part of a larger solution. In 2019, as he stood near the top of the polls for the 2020 Democratic presidential primary, Senator Bernie Sanders proposed a two-part plan to end medical debt for good. The first was the cancellation of all existing past-due medical debt in the country, then estimated at $81 billion. Sanders explained that he planned to negotiate a price with hospitals, physicians’ offices, and debt collectors who currently owned the debt, though he did not say how much the federal government would pay for it. Craig Antico estimated that the entirety of this outstanding debt could be purchased for $500 million, roughly 1/100th of one percent of federal spending in 2019.
By itself this measure would relieve Americans of the burden of medical debt, but only for a moment. The treadmill would not stop, and new overdue bills would be sent to collections the next day. To put a halt to the production of medical debt, Sanders proposed a national single-payer health system without co-payments, deductibles, co-insurance, or any other patient payments at the point of care. And because everyone would be covered by the plan, there would be no more uninsured patients expected to foot the full cost of their care. Through this stepwise process, Americans would be relieved of any existing debts, and freed from the dreaded prospect of incurring such debts in the future.
Much of the discourse about single-payer healthcare (known by the moniker Medicare for All, or sometimes Improved Medicare for All, as Medicare in its current form does require some patient payments) focuses on the difficulty of passing legislation to make it a reality. It is fashionable to express support for the idea in theory but throw one’s hands up at the impossibility of its political prospects. President Obama did this with great frequency in town halls during his 2008 campaign. Even Bernie Sanders said “we ain’t gonna get it” when lamenting the near-term chances for passage of Medicare for All in February of this year.
The pessimism stems, in large part, from the entrenched financial interests that benefit from the current arrangement. While for-profit insurance companies are, quite rightly, the major focus of this attention, debt collectors also have a stake in maintaining the status quo. As early as 1993, hospitals were the source of more business for the nation’s debt collectors than any other industry; in 2017, medical debt was still the most common reason why Americans were contacted by collection agencies. Influential collectors include major figures in business and government, from Tom Reed, a former member of Congress, to Tom Gores, the billionaire owner of the Detroit Pistons. The prospect of the abolition of medical debt, is, to debt collectors, an existential threat.
So, would change be hard? Undoubtedly. But clear-eyed understanding need not pave the way to nihilism. It is true that the road to a more just system of healthcare finance will be very difficult. Organized medicine (and, in particular, the American Medical Association), the hospital lobby, pharmaceutical companies, and the private health insurance industry have used immense sums to lobby and run public relations campaigns against single payer health insurance in the United States for a century. Yet history shows that while entrenched interests do not sit quietly, they are not invincible. When, for instance, the Labour Party launched the National Health Service in 1948, the president of the British Hospital Association claimed the new system was one of “mass murder.” When the Baptist minister and socialist politician Tommy Douglas was elected premier of the Canadian province of Saskatchewan in 1960, he proposed a single-payer healthcare program. The day it began, doctors in the province rebelled, staging a short-lived strike before relenting. But in countries that have established a national healthcare system, the rewards have been great. Healthcare that is free at the point of service—that is, medical care without medical debt—is deeply popular among the people who have the most experience with it. A half-century after the doctors’ strike, voters in a survey conducted by CBC Television chose Tommy Douglas as “The Greatest Canadian.” Even in the midst of funding cuts by a conservative government in 2018, British respondents ranked the National Health Service as their favorite “British thing,” far ahead of the royal family, the armed forces, and British food.
The debate over debt forgiveness repeats arguments—about reform versus revolution, about pragmatic aid versus unintended consequences, about working within the system versus building something new—that liberals and leftists have debated for centuries. Both Taylor and Ashton are both dedicated to the immediate relief of human suffering. They are both acting in good faith and struggling with the contradictions inherent in their work. They have both already done so much for so many. They have shone a light on the absurdity and brutality of our current system, and they have proven that medical debt is not an inevitable feature of American life. In the closing pages of a book titled End Medical Debt, Ashton offered cautious support for Medicare for All. But despite their shared understanding of the harmful effects of medical debt and even the solutions to it, the advocates of forgiveness and abolition have taken divergent paths forward. Along one path, acts of generosity aim to relieve individual misfortunes. On the other, acts of solidarity aim to bring an end to a deadly injustice, and to insist that healthcare is a right and not a commodity.
In the end, though, we must reckon with the bounty hunters of medicine: the debt collectors who haunt the lives of the millions of Americans who cannot pay for their medical care. Any solution that leaves intact an industry that profits off the financial captivity of the poor cannot credibly be called just. It is time to build a future without medical debt or its collectors.
Luke Messac is author of Your Money or Your Life: Debt Collection in American Medicine (Oxford University Press, 2023).