A study published yesterday by the National Bureau of Economic Research questioned the effectiveness of medical debt forgiveness, concluding that individuals who had some or all of their medical debts eliminated did not see any improvement in their mental health or their credit scores. And those who had their debts all or partially eliminated were still just as likely to forego future medical treatments as those who did not have their debts forgiven.
The researchers partnered with RIP Medical Debt and conducted two randomized experiments that relieved $169 million of medical debt for 83,401 people between 2018 and 2020. The first group involved 14,377 who received $19 million in debt relief — these accounts had not yet been placed with a collection agency. The second group involved 61,496 individuals who did not receive debt relief and whose accounts were placed with debt collectors for normal collection activity. Then, the researchers conducted a second experiment involving older medical debt that was purchased for less than $0.01 on the dollar. The two experiments were designed to spotlight the cost-effectiveness of relief at different stages in the collection process.
Comparatively, the group that had its medical debt eliminated and the group that didn’t were not that different, the researchers found — to their disappointment. Patients who had their debts forgiven were just as likely as those who didn’t to have problems paying for medical debt a year later.
While some of the individuals in the study reported a small increase in their credit score, others saw theirs decrease. The researchers posited that for some people with high levels of stress, being told that their medical debts were being taken care of reminded them of other unpaid bills.
