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Haunted for 13 Years by Debt From Childbirth, Then Rescued by a Nonprofit

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“Every day was tough. Every day I think about what I owe, how do I get out of it? Hard.”

Terry Logan

terri logan, 42, Spartanburg, South Carolina

Approximate Medical Debt: $1,400, now $0

Medical problem: premature birth

What happened: Two months before her due date with her second daughter, Terri Logan was feeling weighed down by stress. She was a high school math teacher in Union City, Georgia and just ended her relationship with the baby’s father.

One day the baby stopped moving. Logan went to the hospital where her blood pressure rose, her head was pounding and she passed out. Hours later, their daughter was born via c-section and weighed just 3 pounds. Logan had health insurance through work, but she was responsible for the expenses. She and her baby were going through a health crisis, so money didn’t come up: “That conversation just wasn’t being had at that moment.”

About two weeks after her daughter was fired, Logan was faced with a bill. She couldn’t bring herself to look closely at the sum. “It was one of those moments where you see … commas,” she said. She never opened the bills that came afterward because she knew she couldn’t pay them or handle the stress. “I just avoided it like the plague.”

More bills followed. Eventually they were sent to collections.

The debt piled up on other stressors for the single mother. She developed a debilitating fear that caused more headaches. She had to give up her full-time job as a teacher. “The weight of all that medical debt — oh man, it’s been tough,” she said. “Every day was tough. Every day I think about what I owe, how to get out of it.”

What is broken: Logan is among a growing number of professionals considered underinsured; That means they have an employer-sponsored plan, but it shifts a lot of costs — in the form of co-payments, co-insurance, and deductibles — onto the patient.

This so-called cost-sharing has steadily increased over the past two decades. Last year, the average annual deductible for a single worker with work-related insurance was over $1,669, which is 68% higher than a decade ago, according to an annual employer survey by KFF. Family deductibles can exceed $10,000.

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At the same time, millions of Americans have next to no savings. A nationwide survey conducted by KFF for this project found that half of US adults don’t have the money to pay an unexpected $500 health bill.

That makes debt almost inevitable for anyone with big expenses like having a child, even if they have health insurance. In fact, according to the KFF survey, most Americans who have medical debt were insured.

With her older daughter, Logan said she never saw a bill. It was an uncomplicated birth with no excess. So she figured her insurance would offer similar coverage for the second birth.

What’s left: Almost 13 years after the birth of their second daughter, Logan received yellow envelopes in the mail and got ready to open them. She was finally able to go back to work whenever her health permitted. It was time to address the problem that had haunted her.

As she put it, “It was like, ‘OK, even if you can’t pay it, you need to know who you owe. Eventually you have to start because you have to take care of it to get into a better situation.’”

To her surprise, the envelopes did not contain any bills, but instead contained a note from RIP Medical Debt, a non-profit organization, stating that it had purchased her unpaid medical debt and forgiven it on her behalf. She was shocked: “Wait: What? Who does that?”

Logan read the letter again and cried, absorbing the unexpected gift. “It definitely makes you feel like, ‘You know what? There’s still good in this world,'” she said.

RIP Medical Debt uses donated funds to purchase unpaid medical debt directly from hospitals or on the secondary market for approximately 1% of original value. It selects unpaid bills from lower-income patients — amounting to up to four times the federal poverty line — and simply forgives them rather than trying to collect those loans.

The pandemic has seen donations skyrocket, allowing the group to accelerate hospital debt purchases. To date, it has forgiven $6.7 billion in medical debt and helped 3.6 million people.

Lifting her own burden of debt, Logan said, freed her to pursue long-dormant interests. A lover of the stage, she planned her first singing performance this month.

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About this project

“Diagnosis: Debt” is a reporting partnership between KHN and NPR that examines the extent, impact and root causes of medical debt in America.

The series draws on the KFF Health Care Debt Survey, a survey developed and analyzed by KFF pollsters in collaboration with KHN journalists and editors. The survey was conducted online and by phone in English and Spanish from February 25 to March 20, 2022 among a nationally representative sample of 2,375 US adults, including 1,292 adults with current healthcare debt and 382 adults with healthcare debt the last five years. The sampling error margin is plus or minus 3 percentage points for the full sample and 3 percentage points for those with ongoing debt. For results based on subgroups, the sampling error margin may be higher.

Additional research was conducted by the Urban Institute, which analyzed credit reporting agencies and other poverty, racial, and health demographics to examine where medical debt is concentrated in the US and what factors are associated with high levels of debt.

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The JPMorgan Chase Institute analyzed records from a sample of Chase credit cardholders to investigate how larger medical expenses can impact customer balances.

Reporters from KHN and NPR also conducted hundreds of interviews with patients across the country; spoke to physicians, healthcare industry leaders, consumer advocates, debt attorneys and researchers; and reviewed numerous studies and surveys on medical debt.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues. Along with Policy Analysis and Polling, KHN is one of the three major operational programs of the KFF (Kaiser Family Foundation). KFF is a donated non-profit organization that provides information on health issues to the nation.

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