The Political Scene | The New Yorker

Episode: How to Buy Forgiveness from Medical Debt
Date: July 31, 2023
Host: David Remnick
Guests: Sheila Kolhatkar (New Yorker staff writer), Pastor John Jackman (Trinity Moravian Church, NC), Allison Sesso (President & CEO, RIP Medical Debt)

Overview of the Episode’s Main Theme

This episode explores the problem of crushing medical debt in America—a long-standing issue exacerbated by rising healthcare costs and the COVID-19 pandemic. The discussion centers on an innovative solution: buying and abolishing medical debt through the non-profit RIP Medical Debt, featuring insights from Sheila Kolhatkar’s reporting, Pastor John Jackman’s community action in North Carolina, and the organization’s President & CEO Allison Sesso. The conversation probes both the mechanisms of debt forgiveness and the ethical and systemic implications of why such a model is necessary.

Key Discussion Points & Insights

1. The Scope and Roots of American Medical Debt

• Context: Medical debt burdens millions, far predating COVID-19 and current inflation, leading to a constant cycle of late notices and collection threats ([01:17]).
• Quote:
  • “For so many Americans, the stream of late notices and threatening voicemails never quite ends.”
    —David Remnick ([01:26])

2. The Model of RIP Medical Debt: How It Works

• Mechanism:
  • RIP Medical Debt, founded by two former debt collectors in 2014, collects donations to purchase bundled medical debts at pennies on the dollar and abolishes them, directly impacting credit reports ([02:08], [07:01]).
  • Criteria: Helps those below 400% of the poverty line or those whose debts are ≥5% of income ([08:01]).
• Transformative Impact:
  • Even small amounts raised (e.g., $5,000) can abolish millions in debt due to the low price of uncollectable medical debt ([04:01]–[05:27]).

3. The Case Study: Trinity Moravian Church

• Background:
  • The church is 100 years old, average-sized, and located in an economically diverse North Carolina neighborhood ([02:48]).
  • The congregation has made a deep commitment to serve its urban community despite neighborhood decline ([02:48]).
• Action:

  • Motivated during the pandemic, the church partnered with RIP Medical Debt to target local counties, raising $5,000 and erasing $1.2 million in debt—helping about 1,000 families ([04:01]–[05:27]).

  • This action has become a defining part of the church’s public identity ([06:11]).

  • Quote:

    • “The lady looked at the credit card and said, ‘Oh, you’re the church that buys the medical debt.’ And I’ve never met her before, and that happens all the time now.”
      —Pastor John Jackman ([06:11])

4. Inside the Debt Market

• Debt Buying Economics:
  • Debt buyers purchase unpaid debts cheaply, betting on collecting a fraction through deals or court judgments. Medical debt is uniquely unprofitable for collectors since most debtors truly can’t pay ([07:01]–[10:08]).
  • Quote:
    • “In order for this whole thing to become profitable… they have to make sure that they’re pricing it super dirt cheap. Because the majority of people, especially with medical debt, can't pay.”
      —Allison Sesso ([07:58])
  • If financial situations change or court actions succeed, debt buyers can reclaim assets, but the frequent inability of people to pay suppresses prices further ([10:56]–[11:43]).

5. Who Gets Help and Who Gives

• Recipients:
  • Qualification is blind to everything except financial status—below 400% of poverty or debt exceeding 5% of income ([08:01]).
  • Once debts are purchased, recipients are notified with no strings attached ([08:45]).
• Donors:
  • Churches, corporations, individuals, and crowdsourcing initiatives, with some recipients “paying it forward” in modest contributions ([09:29]).

6. The Ethical and Systemic Dilemma

• Band-Aid vs. Systemic Reform:
  • Buying and forgiving debt is innovative and impactful but highlights the fundamental flaws in the US healthcare and debt collection systems ([11:43]).
  • Quote:
    • “The fact that we need a Kickstarter system for people to pay off medical bills is very disturbing. It’s a sign of just how broken the healthcare system is.”
      —Sheila Kolhatkar ([11:43])
• International Bewilderment:
  • Other developed countries are stunned by America’s medical debt crisis ([12:32]).
  • Quote:
    • “The rest of the world looks at us and says, how come you haven’t figured this out yet?”
      —Pastor John Jackman ([12:32])

7. The Spiritual Context of Debt Forgiveness

• Biblical Roots:
  • The concept of debt forgiveness aligns with ancient religious teachings, especially the “Year of Jubilee” in Leviticus, where debts were forgiven and slaves freed ([13:08]).
  • Quote:
    • “There are a lot of laws about how you treat the poor… and there’s a section about the day of jubilee… all debts were to be forgiven, slaves were to be freed. It was to be an entire cultural reset.”
      —Pastor John Jackman ([13:08])

Notable Quotes & Memorable Moments

• “I had to explain to our members again and again how it was we were able to buy this staggering amount of debt with this little amount of money…”
  —Pastor John Jackman ([05:27])

• “You can’t get blood from a stone.”
  —Allison Sesso ([10:28])

• “I want people to sort of break this intense feeling that they did something wrong and to point to the system through storytelling.”
  —Allison Sesso ([08:45])

Timestamps for Key Segments

• [01:17–02:08] — Introduction of the medical debt crisis and the story’s premise
• [02:08–06:02] — Pastor John Jackman explains his church’s mission, community, and experience abolishing medical debt
• [06:36–07:58] — Allison Sesso describes RIP Medical Debt’s growth and the mechanics of medical debt buying
• [08:01–09:25] — Criteria for debt relief and recipient stories
• [09:29–10:08] — Profile of donors to RIP Medical Debt
• [10:08–11:43] — Understanding the low value of medical debt and the harsh realities of collection
• [11:43–12:32] — The band-aid nature of these efforts and international perspectives
• [12:54–14:15] — The religious and ethical foundations of debt forgiveness

Conclusion

This episode brings together human stories, economic realities, and social critique to illustrate both the promise and the limitations of “buying forgiveness” for medical debt. It highlights a creative, community-driven intervention—while ultimately questioning why such measures are needed in the first place.

For further exploration:

• Visit RIP Medical Debt’s website to learn more or contribute
• Read Sheila Kolhatkar’s reporting in The New Yorker for deeper context