Nonprofit organizations today announced that a joint effort has eliminated $35 million in medical debt for nearly 24,000 Arkansans, or about $1,500 in debt each.
A press release says recipients were randomly selected based on qualifications and account availability. Those selected will receive a notification by mail.
The repayment of the debt was coordinated by RIP medical debt, a national organization that buys debt at reduced rates. Its website says a $100 contribution can pay off $10,000 in medical debt, which was otherwise uncollectible. The Arkansas payments press release did not specify the amount needed to withdraw the $35 million in Arkansas.
The announcement was made by Arkansas Asset Funders Network, the Arkansas Community Institute and Political Institute of Hope, all of which work to help those on low incomes or those who experience discrimination in financial services.d
The Winthrop Rockefeller Foundation, HOPE, the Arkansas Community Foundation and other donors provided money for debt repayment.
The announcement came amid a discussion of ways to reduce medical and legal costs for workers with limited assets and income.
“Medical debt and legal costs, fines and fees create significant barriers to wealth creation,” said Neil Sealy, executive director of ACI. “When individuals are unable to pay for collections, it can set off a catastrophic chain reaction with lasting impacts on their financial security and economic opportunity.”
Today’s discussion included ideas for changes to be made.
On medical debt, ideas included protection against out-of-network medical bills; use federal COVID-19 recovery money for medical debt elimination, and legislation to protect patients from abusive debt collection practices, set interest rate caps, and limit the reporting of medical debt on credit reports.
With respect to judicial debt, ideas included the elimination of certain local fines and fees; the end of driver’s license suspensions for non-payment of fines and changes to the law on the collection of state debts
The statement said 37% of Arkansans have debt in collection, 10% more than the national average and that there are large racial disparities, with abuse disproportionately affecting people of color.