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Debt forgiveness goes only so far

Some Southern Oregonians with unpaid medical debts that have been sold to debt buyers may be in for some good news, thanks to a former Medford resident and, indirectly, cable TV comedy show host John Oliver.

Medford High School graduate Jerry Ashton, who spent his career in the debt collection business, is now, in retirement, forgiving debts instead. He deserves credit for the idea and the hard work of implementing the nonprofit organization that has erased millions of dollars in medical debts for tens of thousands of people. What’s unfortunate is that so many Americans need his help because they can’t pay their medical bills.

Ashton became interested in the concept of buying medical debt with donated money after he worked with Occupy Wall Street activists in New York, where he lives. They enlisted him in a plan to use $700,000 of Occupy’s donated money to buy and retire $30 million in medical debts, and he founded his nonprofit entity, RIP Medical Debt, to continue that work.

Donations were hard to come by, however, and the company was struggling when he connected with “Last Week Tonight with John Oliver.” The comedian wanted to purchase $15 million in debt for $6,000. HBO’s lawyers said the cable network couldn’t do that legally, but Ashton’s tax-exempt nonprofit organization could. After the show aired, bringing public attention to Ashton’s project, donations poured in and RIP Medical Debt was off and running.

Medical care providers frequently sell uncollected debts to debt buyers for pennies on the dollar, and the buyers then resell the obligations to collection agencies who go after the debtors. Ashton’s company buys the same debts with donated money, but instead of collecting, sends the debtors a letter telling them their debt has been forgiven.

Ashton’s company has dealt with third-party buyers of debt portfolios, but he wants to persuade hospitals to sell the debt directly to RIP Medical Debt on similar terms.

That’s good news for the individuals who may see their debts disappear, but Ashton can’t help every American facing crushing medical bills. It’s an indictment of the health care system in this country that treatments are so expensive that ordinary Americans cannot afford to pay for them. When hospitals are forced to sell debts for far less than they are worth, those patients and insurance companies who can pay get charged higher rates to cover the losses. And that means we all end up paying more.

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