Covenant Presbyterian Church on Northland Drive in the Allandale area of Austin has helped relieve $14 million in medical debt.
Mikala Compton/American-Statesman
This week, 10,865 people are getting a letter that reads: “We are writing to share the good news: You no longer owe medical debt listed to the right on this letter. … Rest assured you no longer owe this medical debt.”
A $75,000 donation from Covenant Presbyterian Church in North Austin helped erase $14 million in medical debt for those recipients through the nonprofit Undue Medical Debt. The recipients don’t have to do anything. Their debt already has been paid off.
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The Rev. Jill Williams leads Covenant Presbyterian Church in North Austin. The church turned a budget surplus into $14 million in medical debt relief in Travis County.
Provided by Covenant Presbyterian Church
At the end of last year, the church found itself with a $200,000 surplus in its $5.47 million budget, which already included $1.1 million allocated for charity work.
The church could have saved the $200,000 for a rainy day or created a new program or bought new furnishings. Instead, the church’s elders decided to give the $200,000 to its Mission Committee to figure out how best to spend the excess on community giving.
“Covenant has incredibly generous members,” said Whitney Bell, mission director for the church of almost 2,000 individual members. The elders told the committee to “use this to love and service this community,” Bell said.
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Undue Medical Debt, a national nonprofit, buys medical debt in bulk from hospitals, practice groups, ambulance companies and collections services. Undue is able to buy the debt for pennies on the dollar because of the scale of the debt it is buying and the technology and legal protections it has in place to do it at a systemwide level, said Allison Sesso, the president and CEO of Undue Medical Debt.
The Rev. Jill Williams leads Covenant Presbyterian Church in North Austin. The church turned a budget surplus into $14 million in medical debt relief in Travis County.
Provided by Covenant Presbyterian Church
The companies that hold the debt like Undue because they are getting something for debt they might have had to spend a lot of time and money to collect or might never collect, she said. The debt is usually between 1 to 7 years old, Sesso said. On average, every $1 clears about $100 worth of debt.
Undue only pays the debt of people who are making less than 400% of the federal poverty level, which is $63,840 for a single person and $132,000 for a family of four. It will also pay the debt of people making more than 400% of the federal poverty level if that debt is 5% or greater of their income.
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The church committee worked with the nonprofit to identify where in Travis County there was the most need. Undue narrowed the pool to people living in the 78753 ZIP code. That area north of U.S. 183, south of Howard Lane, east of Lamar Boulevard and west of Dessau Road has an average household income of $65,170, about two-thirds of the average household income of Austin and Travis County.
A Texas-size problem
Church communities and other groups putting together a fundraising campaign is how Undue Medical Debt gets its funding.
“It’s easy to start a campaign,” Sesso said. “We hope they are trend-setters. There’s a lot of medical debt in Texas. You’re more likely to carry debt in Texas than other places.”
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In Texas, at any one time, 10.6% of adults have unpaid medical bills, higher than the national average of 8.6%, according to KFF and the Peterson Center for Healthcare’s analysis of the U.S. Census Bureau’s 2019 to 2021 Survey of Income and Program Participation.
Texas has the highest share of people without health insurance in the country. A KFF report released this summer found that 19.2% of people under age 65 did not have health insurance, including 13.7% of children.
With Texas not expanding Medicaid, adults without dependent children are not eligible for Medicaid, and parents have to make less than 17% of the federal poverty level ($5,280 annually for a family of four) to receive benefits unless the mother is pregnant or within 12 months of giving birth.
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Funding barrier-reducing projects
This is the second time Covenant Presbyterian has given to the nonprofit. In 2020, just before the pandemic, it gave $100,000 to remove $16 million of medical debt in a much broader area of Central Texas. At the time, Undue was not buying as much local debt as it is now, which is why the geographic scope of that donation was larger.
Covenant’s other funds went to three other nonprofits that also address a “significant barrier” people face, Bell said.
Foundation Communities received $75,000, which is expected to provide housing stability for about 100 people. St. Vincent DePaul received $25,000 for its mini-loan program to help people turn unaffordable payday loans into affordable financing.
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The other $25,000 went to Texas RioGrande Legal Aid to help people get identification documents, which are required to get an apartment, apply for benefits and secure employment.
“The point is not to get the pat on the back and feel good about ourselves,” Bell said. “We are taking what God gave us and trusting that God will do the rest. We’re just grateful we’ll be part of it.”
Last time Covenant gave to Undue, the church did get calls of gratitude but also calls questioning whether it was real. “It was fun to be a part of people getting good news,” Bell said.
What can you do if you have medical debt?
Check to see that the bill is accurate. Did you receive those services?
If it is a hospital bill, check to see if you qualify for that hospital’s charity care program. You can find the program application and qualifications, as well as the billing policies, on a hospital’s website. The hospitals consider income and sometimes assets to determine eligibility. If you have difficulty with the hospital, seek help from Dollar For, a nonprofit that helps people get charity care.
Arrange for a payment plan. Most medical companies would rather you pay something on a regular basis than have delinquent debt.
Avoid putting it on a credit card or taking out a loan. Medical debt is unlikely to damage your credit rating, but credit card debt and loans can. The high interest also makes paying off the debt harder.
Before the next big medical bill happens, see what insurance programs you might qualify for, such as Medicaid, Medicare or Children’s Health Insurance Program. In Travis County, if you make less than 200% of the federal poverty level, you can get Central Health’s Medical Assistance Program. Starting Nov. 1, you also can consider looking for insurance on the federal Marketplace at healthcare.gov.
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Did you receive an Undue Medical Debt letter?
The Statesman would love to tell your story. Contact Nicole Villalpando at nvillalpando@statesman.com.
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