SCAN, CareOregon Grants Help Eliminate $110M in Medical Debt

SCAN and CareOregon have granted $345,000 to a nonprofit organization that helps eliminate medical debt, a move expected to erase $110 million in debt for residents across five states.

RIP Medical Debt acquires medical debts from individuals facing financial challenges and abolishes the debts.

SCAN, a diversified not-for-profit healthcare organization, has provided $285,000 to RIP Medical Debt. CareOregon, a nonprofit healthcare organization that serves Oregon Health Plan members, granted $60,000.

RIP Medical Debt will use the grants to acquire and eliminate $110 million in medical debt from nearly 70,000 people living in areas served by SCAN and CareOregon, including Arizona, California, Nevada, Oregon, and Texas.

The initiative will benefit low-income residents in particular, as the individuals experiencing the debt relief have a household income at or below 400 percent of the federal poverty level or have medical debt representing 5 percent or more of their annual household income.

“Medical debt presents a catastrophic burden on millions of vulnerable Americans and disproportionality impacts people of color, often forcing them to choose between paying off medical bills and covering their basic needs—including their healthcare needs,” Sachin H Jain, MD, chief executive officer of SCAN Group and SCAN Health Plan, said in the press release.

“SCAN partnered with RIP Medical Debt to erase the debt burden on tens of thousands of individuals as part of our commitment to health equity and to removing barriers that prevent people from accessing healthcare.”

In the coming weeks, the nonprofit will notify recipients via mail that part or all of their medical debt will be eliminated. SCAN and CareOregon are the first health plans to directly fund the relief of privately held medical debt through RIP Medical Debt, the press release noted.

In Oregon alone, 60 percent of people filing for bankruptcy had medical debt, one study found.

“By relieving this debt, we are helping to create stronger communities and more equitable access to healthcare throughout Oregon,” said Eric C Hunter, president and chief executive officer of CareOregon.

Medical debt can prevent people from accessing the care they need. In 2022, 44 percent of Americans avoided the doctor when they were sick because of costs, according to the Consumer Finance Protection Bureau (CFPB).

Medical debt also poses health equity issues. KFF Health News estimated there are 100 million adults in the US with medical debt, with Black and Hispanic individuals more likely to have debt than White adults.

Policymakers have been taking steps to address the medical debt crisis with various debt relief initiatives. For example, in April, the Oregon House of Representatives passed a bill requiring nonprofit hospitals to provide free or discounted care to low-income patients to help them avoid medical debt.

On a broader scale, the Biden Administration announced a series of reforms last year to protect consumers from medical debt. HHS Secretary Xavier Becerra directed HHS to evaluate how provider billing practices impact care access and affordability. Additionally, the announcement said HHS would collect data from providers that detail medical bill collection practices, lawsuits against patients, debt-buying practices, and other information to influence policy recommendations.

Three major credit bureaus, Equifax, Experian, and TransUnion, also announced the removal of any medical debt collection with an initial reported balance of under $500 from US consumer credit reports.