Haunted for 13 years by debt from childbirth, then rescued by a nonprofit

Every day was tough. Every day, I'm thinking about what I owe, how am I going to get out of this? Tough."

Terri Logan

Terri Logan, 42, Spartanburg, South Carolina

Approximate Medical Debt: $1,400, now $0

Medical Issue: Premature childbirth

What Happened: Two months ahead of her due date with her second daughter, Terri Logan felt weighed down by stress. She was a high school math teacher in Union City, Georgia, and was ending her relationship with the baby's father.

One day the baby stopped moving. Logan went to the hospital, where her blood pressure spiked, her head throbbed, and she blacked out. Hours later, her daughter was born by cesarean section, weighing only 3 pounds. Logan had health insurance through work, but she was responsible for out-of-pocket charges. She and her baby were in a health crisis, so the issue of money didn't come up: "That conversation just wasn't had in that moment."

About two weeks after her daughter was discharged, Logan was hit with a bill. She couldn't bring herself to take a close look at the total. "It was one of those moments when you see … commas," she said. She never opened the bills that arrived after that, knowing she couldn't pay them or handle the stress. "I just avoided it like the plague."

Other bills followed. Eventually, they were sent to collections.

The debt piled on to other stressors for the single mom. She developed debilitating anxiety, which brought on more headaches. She had to give up her full-time teaching job. "The weight of all of that medical debt — oh, man, it was tough," she said. "Every day was tough. Every day, I'm thinking about what I owe, how am I going to get out of this."

What's Broken: Logan is among a growing number of working people who are considered under-insured; that is, they have an employer-sponsored plan but it pushes a lot of costs — in the form of copays, coinsurance, and deductibles — onto the patient.

This cost sharing, as it's called, has increased steadily over the past two decades. Last year, the average annual deductible for a single worker with job-based coverage topped $1,669, which is 68% higher than a decade ago, according to an annual employer survey by KFF. Family deductibles can top $10,000.

At the same time, millions of Americans have next to no savings. A nationwide poll conducted by KFF for this project found that half of U.S. adults don't have the cash to cover an unexpected $500 health care bill.

That makes debt almost inevitable for anyone with a large expense like the birth of a child, even if they have health insurance. Indeed, most Americans who have medical debt had coverage, according to the KFF poll.

With her older daughter, Logan said, she never saw a bill. It was an uncomplicated birth with no out-of-pocket charges. So she assumed her insurance would provide similar coverage for the second birth.

What's Left: Nearly 13 years after her second daughter's birth, Logan received yellow envelopes by mail and braced herself to open them. She was finally able to work again, whenever her health permitted. It was time to start tackling the problem that had dogged her.

As she put it: "It was like, 'OK, even if you can't pay it, you need to know who you owe. At some point, you gotta start, because you gotta take care of this to get into a better situation.'"

To her surprise, the envelopes did not contain bills, but rather a notice from RIP Medical Debt, a nonprofit, saying it had bought her unpaid medical debts and forgiven them on her behalf. She was shocked: "Wait: What? Who does that?"

Logan reread the letter and cried, absorbing the unexpected gift. "It definitely gives you a sense of, 'You know what? There's still good in this world,'" she said.

RIP Medical Debt uses donated funds to buy unpaid medical debt, directly from hospitals or on the secondary market, for about 1% of the original value. It selects unpaid bills held by lower-income patients — those making up to four times the federal poverty level — and instead of trying to collect on those loans, simply forgives them.

Through the pandemic, donations have skyrocketed, enabling the group to accelerate its purchase of hospital debts. To date, it has forgiven $6.7 billion in medical debt, helping 3.6 million people.

The lifting of her own debt burden, Logan said, has freed her to pursue long-dormant interests. A lover of the stage, she planned her first singing performance this month.

About this project

"Diagnosis: Debt" is a reporting partnership between KHN and NPR exploring the scale, impact, and causes of medical debt in America.

The series draws on the "KFF Health Care Debt Survey," a poll designed and analyzed by public opinion researchers at KFF in collaboration with KHN journalists and editors. The survey was conducted Feb. 25 through March 20, 2022, online and via telephone, in English and Spanish, among a nationally representative sample of 2,375 U.S. adults, including 1,292 adults with current health care debt and 382 adults who had health care debt in the past five years. The margin of sampling error is plus or minus 3 percentage points for the full sample and 3 percentage points for those with current debt. For results based on subgroups, the margin of sampling error may be higher.

Additional research was conducted by the Urban Institute, which analyzed credit bureau and other demographic data on poverty, race, and health status to explore where medical debt is concentrated in the U.S. and what factors are associated with high debt levels.

The JPMorgan Chase Institute analyzed records from a sampling of Chase credit card holders to look at how customers' balances may be affected by major medical expenses.

Reporters from KHN and NPR also conducted hundreds of interviews with patients across the country; spoke with physicians, health industry leaders, consumer advocates, debt lawyers, and researchers; and reviewed scores of studies and surveys about medical debt.