SCAN Group and CareOregon have issued grants to RIP Medical Debt that will wipe out millions in patients' medical debt.
The two nonprofit insurers, which are in the midst of merging, will together donate $345,000 to the organization, funding debt relief for 67,000 people across Arizona, California, Nevada, Oregon and Texas, where the health plans operate, according to an announcement issued Wednesday morning.
The grant will abolish $110 million in medical debt, and all of the beneficiaries have incomes that are at or below 400% of the federal poverty level, or their debt represents 5% or more of their household income.
"I think just too many people are being bankrupted or placed into medical debt by a healthcare system that is increasingly focused on sustaining itself at literally any cost," Sachin Jain, M.D., CEO of SCAN, told Fierce Healthcare.
As healthcare costs rise, so too has medical debt grown as a major public health issue in the U.S. The announcement cited a KFF analysis that estimated 100 million Americans have medical debt, with Black and Hispanic patients more likely than white patients to have such debt.
Many patients also skip medical care because of the cost. Last year, 44% of Americans skipped a visit to the doctor when they were ill or injured because of the cost, according to the announcement.
Jain said that insurers have a duty to assist patients and members who are struggling with cost but also to strive to offer more products that make care more affordable for them.
"We also have a secondary obligation of not creating as much debt in the first place," he said.
In the announcement, the insurers said they're the first health plans in the country to directly fund relief for medical debt. Other payers have matched employee donations to such efforts, the partners said.
Jain said that SCAN and CareOregon are hopeful this first step could inspire others in the industry, including payers with a large national footprint, to launch similar initiatives.
"We believe that part of our mandate is to inspire the industry to do the right thing," he said.