Dive Brief:
- John Oliver, host of HBO's “Last Week Tonight,” put the matter of medical debt center stage with his recent segment criticizing the tactics and lack of regulation of the debt collection industry.
- Oliver's episode demonstrated the ease of creating one's own collection company, and delighted viewers with Oliver forgiving the $15 million in medical debt he purchased the right to collect from 9,000 people for a mere $60,000.
- While the stunt brought the matter of collections squarely into the national discourse this week, it did comparatively little to evoke outrage over the underlying issues behind medical debt, which include medical costs so high that even many with health insurance have difficulty paying their bills.
Dive Insight:
Oliver's angle focused on consumer protection, noting how easy it was to purchase the debt and acquire the personal information--including names, personal addresses and Social Security numbers--for thousands of people for less than half a penny to the dollar.
Much of the discussion revolved around the ethics of collections companies pursuing debt for which the debtors are no longer legally responsible due to it being out-of-statute or already handled through bankruptcy or other measures, and some companies' use of harassment to do so.
What the conversation did not address was the matter of the initial debts, from the high cost of medical care, to the write-offs, to the specific handling of medical debt vs. consumer debt.
According to Time, medical debt represents about half of all debt on credit reports and about one in five adults have had difficulty paying their medical bills, even with insurance. The Time report added that medical bills are a category of their own due to their complexity and frequent errors, and that as a result they often get handed off to collections agencies fairly quickly, even if the patient is in good standing.