Church Pays Off $5 Million of Iowans' Medical Debt for Christmas

Some Iowans may receive an unexpected holiday gift this year: the freedom from medical debt.

By partnering with a debt-forgiveness charity called RIP Medical Debt, the Capitol Hill Lutheran Church in Des Moines purchased $5 million dollars in medical debt within the state. Reverend Minna Bothwell told the Des Moines Register on Thursday that the idea of making the gesture came from members of her congregation. RIP Medical Debt, a non-profit organization, abolishes large amounts of medical debt after purchasing it at a discount from collection agencies.

Bothwell said she asked RIP Medical Debt "how much money it would take to forgive all the medical debt in Polk County. They responded, 'With what you have, you could forgive debt in all of Iowa.'"

In a video posted to Facebook in November, Bothwell said that Capitol Hill Lutheran Church "purchased all of Iowa's medical debt that RIP had access to, a total of $5 million. And we are going to forgive every cent of it."

Bothwell also announced that her congregation would start a second donation drive in order to purchase all of the medical debt in the neighboring state of Missouri.

"2020 has been a rough year for everyone," Bothwell told the Register. Hopefully, when people receive this news, they start the year off better with a significant weight off their shoulders."

iowa church forgives medical debt
A Lutheran church in Iowa partnered with a non-profit organization to wipe out $5 million in medical debt across the state. iStock/Getty

According to RIP Medical Debt's website, the organization purchases medical debt portfolios for individuals near the poverty line. Once the debt is bought and forgiven, the charity sends out forgiveness notices and allows individuals who have been impacted by heavy medical debt to begin rebuilding their credit. As of December 11, RIP Medical Debt has forgiven over $2,923,061,000 in debt.

Many Americans have struggled with medical debt, particularly during the COVID-19 pandemic. As non-essential businesses closed in order to curb the spread of the virus, workers for those businesses lost their jobs. For many, their health insurance was connected to their employment. According to a survey taken by Credit Karma in August of almost 20 million members, approximately $45 billion of medical debt has been placed into collections, which works out to roughly $2,200 in debt per member.

In March, a coronavirus economic stimulus package called the CARES Act extended some financial relief to Americans. Those provisions, including extended unemployment benefits and a moratorium on evictions, are expected to expire at the end of December.

After weeks of negotiations, lawmakers from both the GOP and the Democrat Party unveiled a new economic stimulus bill with a price tag of roughly $908 billion. The bill proposes a temporary raise of unemployment benefits by $300 per week for 16 weeks. However, some lawmakers are pushing for stimulus checks to be added to the bill in addition to the rise in unemployment benefits. Vermont Senator Bernie Sanders called for checks in the amount of $1,200 to be sent to eligible Americans as part of the new proposal.

"I will insist that any agreement in terms of a COVID-19 relief package must include not only strong unemployment benefits," Sanders said in a Friday floor speech, "but a $1,200 direct payment for the working families of this country similarly structured to what was included in the CARES package of March."

Newsweek reached out to Sanders's office for comment.