Put aside whatever shred of healthcare decency the Senate happens to be ripping out at the moment and take a look at Better, a startup helping people deal with out-of-network medical bills. The startup has just pledged 100 percent of its revenue towards relieving those stuck in serious medical debt — at least until this fall.
Better raised $1.1 million in funding from Initialized Capital, Designer Fund and various angels when it launched this spring but will not be using the money raised to pay down the debt. Instead, the startup has pledged to secure up to $16 million in medical debt from its revenue. *While that seems like quite a large chunk to pledge, Better is able to buy the debt at a fraction of the original amount and says the final total will be closer to tens of thousands of dollars.
“When people use our service, we charge them 10 percent of the money they get back from their insurance. That is the money we are using to purchase and forgive the medical debt,” she told TechCrunch.
In the meantime, here’s why this is such a big deal: National medical costs hit $3.35 trillion last year, with nearly 43 percent of Americans unable to pay down those costs. That type of debt affects one in every five Americans, according to a Kaiser/New York Times, survey and often is cited as the number one reason for personal bankruptcy filings in the U.S. The situation is most dire for those without insurance, affecting a little more than half the uninsured population. Imagine what happens if the GOP gets its way with the current state of the American Health Care Act (AHCA).
Better has a daunting task ahead if it wants to provide medical debt assistance. The startup has enlisted the help of the nonprofit organization RIP Medical Debt to get it there. The nonprofit helps reduce the amount of debt owed by negotiating with billing agencies, and then uses donations to pay down the debt for those in need.
Norman also has capped the help at what would equal $16 million in medical debt (but, as stated above, would be a fraction of that amount ) from Better’s profits. Last year, John Oliver conducted a similar stunt on his show “Last Week Tonight” when he pledged to give away $15 million to relieve American’s medical debt. The giveaway was the largest in television history, surpassing even Oprah’s magnanimity. Though Norman does not have her own show, she told TechCrunch she wanted to beat Oliver’s number.
“We have a place where we can do a really good job and make sure people are getting compensated and reimbursed and they actually get that money back and they are actually able to use that health insurance they pay so much for,” Norman said. “But it’s really important to me as we are doing that to keep our eyes open to all these other places where this system isn’t working for them and find ways that we can help.”
*An earlier version of this story incorrectly stated Better would be giving away $16 million in revenue to secure medical debt. It should end up a fraction of that amount but will equal $16 million in debt, according to the company.