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Undue Medical Debt, a national nonprofit organisation, has announced the acquisition of $30 billion in outstanding medical debt from Pendrick Capital Partners, a third-party debt buyer. This deal, the largest in the nonprofit’s history, is expected to bring relief to an estimated 20 million patients across the United States.
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The acquisition process is expected to take 18-24 months, during which time the nonprofit will inform patients of their debt relief. However, any acquired medical debts reported to credit bureaus have already been removed, and all collection actions have ceased. The average amount erased is estimated to be around $1,100 per patient, with the highest debt relieved being over $350,000.
Undue Medical Debt leveraged the scale of the debt purchase to negotiate a substantial discount on the transaction, paying less than a penny for each dollar of debt. The nonprofit is using funding from government partners, donors like MacKenzie Scott, and fundraising efforts to support the purchase, with payments due every quarter to Pendrick over the next 18 months
“This deal underscores that the way we finance health care in the U.S. is fundamentally broken,” said Allison Sesso, president and CEO of Undue Medical Debt. “Patients are increasingly left on the hook for balances they cannot afford just because they got sick, were in an accident, or were born with a chronic condition.”
Sesso added, “Undue’s intervention is not a silver bullet, and much work remains to create an equitable and comprehensive healthcare financing ecosystem, but through this effort with Pendrick, we are stopping collections on a monumental number of medical debts and helping tens of millions of families breathe a little easier by mitigating the emotional and financial burdens of medical debt.
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