Episcopal Diocese raising funds to wipe out $2.5 million of Nebraskans' medical debt

The parishioner, a retired Army doctor, was concerned about the number of people burdened by medical debt. Was there a way the church could help?

Winton did some research and approached the bishop of the Episcopal Diocese of Nebraska with a potential plan. The bishop gave the OK.

Now the diocese, which has about 50 churches scattered across the state, is seeking to raise $25,000 in order to erase $2.5 million in medical debt owed by Nebraskans.

To do it, the diocese is partnering with a nonprofit organization called Undue Medical Debt, formerly RIP Medical Debt. Using donor dollars, the organization buys debt from collectors at a steep discount and pays it off. Every dollar donated erases about $100 of medical debt.

“It’s so simplistically beautiful but it has a giant impact,” Winton said.

About 170,000 or 11.6% of adults in Nebraska reported having medical debt in a given year from 2019 and 2021, according to the latest figures from KFF, a nonprofit organization that focuses on health policy. The U.S. average at the time was 8.6%.

Americans in 2021 owed at least $220 billion in such debt, despite the fact that more than 90% of the population had some form of insurance. More than 121,800 Nebraskans were uninsured in 2023, according to the organization, or about 6.3% of the state’s population. Nationwide, the number of uninsured was 8%.

Winton said his team recognizes that their fundraising campaign won’t solve all the problems people face within the healthcare system. “It’s a Band-Aid,” he said. “But when you’re bleeding, a Band-Aid is what you need first.”

Nor is the diocese the first to seek to staunch that bleeding. So far, Undue Medical Debt has relieved nearly $23 billion in medical debt for more than 14.7 million Americans.

Allison Sesso, the organization’s president and CEO, said Nebraska churches, student groups and others that have worked with the organization so far have relieved $22.4 million in debt for nearly 13,700 of their fellow residents.

She gives credit to the donors who work with organization. While she agreed that such efforts won’t end the problem, it does provide relief for recipients, thousands of them at a time.

“It is solving it for those individuals,” she said. “And it is really meaningful for the people who get the help.”

Among the other Nebraska groups who have relieved debt through the organization is a Creighton University student group called Students for a National Health Program. The group raised a little more than $10,000 during the last school year, which alleviated nearly $2.2 million in debt, said Marshall Biven, a Creighton medical student and the student group’s vice president. The amount Undue can erase varies based on the rates they can negotiate.

Sesso said a lot of medical debt comes as a result of people being underinsured, such as having high deductible insurance plans that leave them responsible for the first several thousand dollars worth of costs.

Not only are health care costs forecast to increase in the coming year, the number of uninsured Americans is expected to increase over time as a result of cuts to Medicaid, and additional paperwork and work requirements, under the latest federal budget bill. For those covered under the Affordable Care Act, also known as Obamacare, uncertainties remain about whether Congress will continue pandemic-era subsidies set to expire in December.

Also a concern, Sesso said, is a recent court ruling in Texas blocking a Biden-era rule that would have removed medical debt from consumer credit reports. Unpaid debts can lower credit scores, making it harder for people to borrow money to buy homes, cars or businesses.

Nebraska, she said, is not among the 14 states that have acted on their own to remove medical debt from credit reports. Other steps states can take to protect people from medical debt are increasing homestead exemptions so people can’t lose their homes and limiting wage garnishment.

Medical debt can accumulate despite the availability of free or low-cost clinics, such as federally qualified health centers that charge based on a sliding income scale. The state’s hospitals each year give millions in charity care and most will negotiate payment plans. The Nebraska Hospital Association tallied nearly $23 million in debt hospitals were not able to collect in 2024, which is part of that total.

Winton said the Episcopal diocese’s fundraising effort isn’t intended to be just a church initiative but a community-building effort with people from across the state helping others across Nebraska.

One such campaign in recent years focused on those even closer to home. In Lincoln, the First-Plymouth Congregational Church raised $556,000 between 2022 and 2023, enough to wipe out debt of 600 neighborhood families, said Juan Carlos Huertas, a pastor there.

While the church initially worked with a local collector to purchase debt at about 93 cents on the dollar, the church also paid off some debt at a lower cost through Undue Medical Debt.

“Helping neighbors was such an amazing thing,” Huertas said. “We had folks who walked from their houses to the church to say thank you.”

Winton noted that individuals can’t apply to have their debt erased through the diocese’s campaign. Undue Medical Debt essentially purchases a portfolio of debt. The diocese won’t get a list of people who have their debt relieved, but it will have the opportunity to craft a letter for beneficiaries acknowledging that their debt has been paid courtesy of churches and people across the state.

Charles Plantz, a retired county court judge in Rushville who is helping with the campaign, said a majority of the civil jurisdiction cases the court saw involved medical debt.

He doesn’t object to the process of buying debt to try and collect on it. But those who typically wound up in court simply couldn’t make the payments and didn’t have the resources to hire a lawyer or resolve it themselves. Often, their wages were garnished for years.

The hope, he said, is that people can get the medical care they need. “It will make a difference to people,” he said.

Winton said the diocese so far is about a third of its way to its goal. If the campaign goes over, they’ll pay off more debt. The campaign is set to run through mid-September. To contribute, visit the campaign’s page on the Undue Medical Debt portal at https://bit.ly/3TgHQLr