2014-04-08

Co.Exist

The Quest To Eliminate Debts From Medical Bills

Would we want to world without debt? Almost certainly not,” she says. “But would we want a world where certain types of debt is barred?

For a few cents on the dollar, StrikeDebt buys the medical debt burdening millions of American families--and then abolishes it. An offshoot of the Occupy Wall Street movement, the group is raising enough money--$701,000 so far--to cancel more than $14 million in bad medical debt. Then it plans to take on the concept of debt itself.

StrikeDebt sees itself as a movement pushing a new (or rather, very old) view on the nature of debt. “Any medical debt is illegitimate debt,” says Thomas Gokey, an assistant professor at Syracuse University and spokesperson for Strike Debt, drawing parallels to Martin Luther King’s differentiation between just and unjust laws. ”It is criminal that it exists, and it shouldn’t. The reason it exist is because we are defaulting on our true debts to one another. ... The fundamental question we’re asking ourselves, and we want to ask everyone is, ‘Which debts do we truly owe to one another?'"

The view, while fringe today, was once at the heart of major religions including Christianity, Catholicism, Islam, and Judaism which considered debt and interest, also known as usury, illegal and immoral, particularly among the faithful. It was also a popular bipartisan position (at least until recently) driving the half-century long project to guarantee universal health care in the United States. Although the U.S. boasts one of the most advanced medical systems in the world, it pays more--and delivers relatively less in terms of health outcomes--than almost any other developed country. At the same time, the number one reason for declaring bankruptcy in the U.S. is unpaid medical bills.

This has left StrikeDebt’s promoters in a difficult position. The Affordable Care Act--President Obama’s signature legislation--protects against catastrophic medical expenses, but does not cover those unable to afford thousands of dollars of costs before medical insurance kicks in. Yet fierce political opposition exists against extending health care coverage, primarily among Republicans, around the rejection of an individual requirement (or “mandate”) to purchase insurance, government expansion, and skepticism about the government's ability to deliver quality care.

So StrikeDebt’s first weapon in the fight is the Rolling Jubilee. The decentralized campaign, coordinated online and local chapters, buys back bad medical debt on the secondary market at a steep discount. Once StrikeDebt owns it, the debt is forgiven erasing the obligations of 2,693 medical debtors in 45 states so far.

Mary King, a professor of economics at Portland State University says StrikeDebt’s strategy could have an impact even if the total amount of debt was small. “It’s not a magic number,” she says. “It’s just exactly what you see: how many people owe how much, and who much relief you can provide.”

Still King says debt has its uses. Credit frees up productive investment in the future. A modern world where we can buy a house, earn an education, or start a businesses, even without paying the money upfront, relies on interest-based financing. Opportunity, in this case, equals debt. “The world of finance, despite its dark side, still does a world of good,” says King. “There is a real reason for interest. [It] solves a fundamental time problem: you produce in one period and sell in another period. You need to bridge the time gap--that’s real.”

But she agrees with Gorkey that society faces a question “Would we want to world without debt? Almost certainly not,” she says. “But would we want a world where certain types of debt is barred? Student debt? Medical debt? It’s even possible to imagine that the privilege of creating debt--and enormous profits of it--was restricted to the public sphere.”

StrikeDebt has already committed to reducing millions in medical debt--a drop in the bucket compared to Americans’ billions in medical debt--and then shift toward other forms of debt. But it ultimately has a bigger goal. “We're trying to do something that no one really knows how to do: organize a debt resistance movement,” says Gokey.

[Image: Abstract via Shutterstock]

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