Low-income Upstate residents who owe years-old medical bills could be among about 1,000 people getting an envelope containing the good news that their debt has been wiped away.
Tom Ervin and his wife, Kathryn Williams, residents of Greenville, donated $15,000 recently to the nonprofit RIP Medical Debt.
In return, the couple received a report from RIP Medical Debt showing the donation abolished $1.5 million in debt for about 1,000 people living in Upstate counties, where research from the Urban Institute shows on average 44 percent of the population has medical debt in collections.
In fact, South Carolina has the third-highest percent of residents owing medical bills, RIP Medical Debt reports. Donations have abolished $4 million of medical debt in South Carolina. The group erases debts for people who make fewer than two times the federal poverty level, which is about $25,000 for a single person.
Jerry Ashton, one of the charity's founders, has decades of experience in the credit and collections fields. He and his cohort founded RIP Medical Debt on the idea that they could do what they had often done: buy bundled portfolios of debt, negotiating the price down to a fraction of the cost of the debt in the first place.
Typically, the buyer would then contact the debtors and hound them for their money. RIP Medical Debt forgives it.
"I've become a predatory giver," Ashton joked.
John Oliver featured the nonprofit on his talk show in 2016. Showrunners spent $60,000 on a medical debt portfolio worth $14.9 million. Oliver then pressed a comically large button on air and forgave the medical debt of about 9,000 Texans, calling it the record amount ever given away on television.
About three years later, the New York-based nonprofit says it is aiming for the $1 billion mark in total forgiven debt. RIP Medical Debt has forgiven just over $900 million in its five years, Ashton said. One in six Americans have past-due medical bills, owing some $81 billion total, according to PBS.
In the simplest terms, RIP Medical Debt is able to abolish $1 million worth of medical debt for every $10,000 donated.
"The bang for the buck is nothing like I’ve ever seen," Ervin said.
He and his wife plan to donate more to the organization, next in the Lowcountry. The charity said it has received 76 donations from South Carolina residents amounting to $20,000, or about $2 million erased in medical debt. Ervin and Williams' contribution is the largest to date in the state.
Now a member of the South Carolina Public Service Commission, Ervin is a retired circuit court judge, former state representative and ran for the Republican party's nomination for governor in 2014 against Nikki Haley. He spent 15 years as a disability attorney in a practice with his wife, where they handled disability appeals.
Ervin said he developed a compassion for people facing high medical bills. Some of his clients were forced into homelessness while waiting for their appeals to move through the Social Security Administration.
Forty-three percent of South Carolinians have medical bills in collections, 10 percentage points higher than the national figure, according to research from the Urban Institute, a left-leaning think tank.
A little-known mechanism at the S.C. Department of Revenue called the Setoff Debt Program allows select hospitals to collect citizens' tax refunds to pay past-due medical bills if they can show ties to state or county governments. Those ties are often tenuous.
Ervin said he believes that is because of South Carolina's high rate of poverty, which is the 42nd-worst in the country. He also laid the blame on South Carolina's decision not to expand Medicaid under the Affordable Care ACt, and high numbers of people without health insurance.
A disproportionate share of people owing medical bills are minorities. Many more people have that kind of debt than a student loan burden, although the average amount owed to schools is much higher.
Ashton said people often call RIP Medical Debt, hoping the group can wipe away financial woes from medical bills for them, too. The group has to turn them down because it only purchases medical debt in groups.
The current health care system, Ashton said, leaves far too many in debt and "has no heart."