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The Burden of Medical Debt and the Impact of Debt Forgiveness, Younger Debt Study
Last registered on June 17, 2019

Pre-Trial

Trial Information
General Information
Title
The Burden of Medical Debt and the Impact of Debt Forgiveness, Younger Debt Study
RCT ID
AEARCTR-0003664
Initial registration date
December 12, 2018
Last updated
June 17, 2019 2:50 PM EDT
Location(s)

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Primary Investigator
Affiliation
Chicago Booth
Other Primary Investigator(s)
PI Affiliation
University of California Los Angeles
PI Affiliation
University of California Berkeley
PI Affiliation
Massachusetts Institute of Technology
Additional Trial Information
Status
In development
Start date
2018-08-30
End date
2020-07-01
Secondary IDs
Abstract
Medical debt is potentially a large burden for many Americans—with 44 million individuals holding an aggregate $75 billion in medical debt. While these nominal amounts are staggering, it is unclear to what extent medical debt harms financial well-being. Medical debt recovery rates are low, suggesting that the pure “balance sheet” cost of medical debt is modest for most individuals. Yet medical debt may harm individuals through lower credit scores, higher interest rates, and reduced access to credit—impairing economic opportunities and perhaps even locking individuals in “debt traps.” Collaborating with RIP Medical Debt, a non-profit that buys and abolishes medical debt, we will implement a randomized-control trial (RCT) to study the impact of medical debt. Medical debt will be forgiven for randomly chosen “treated” individuals, while collections efforts will proceed as normal for “control” individuals. Outcomes will be measured using credit bureau data. This study complements the trial registered as AEARCTR-0003332. While the other study focuses on older debt (typically more than 2 years old), this study focuses on the purchase of younger debt (typically less than 2 years old).
External Link(s)
Registration Citation
Citation
Kluender, Raymond et al. 2019. "The Burden of Medical Debt and the Impact of Debt Forgiveness, Younger Debt Study." AEA RCT Registry. June 17. https://doi.org/10.1257/rct.3664-2.0.
Former Citation
Kluender, Raymond et al. 2019. "The Burden of Medical Debt and the Impact of Debt Forgiveness, Younger Debt Study." AEA RCT Registry. June 17. https://www.socialscienceregistry.org/trials/3664/history/48284.
Sponsors & Partners

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Experimental Details
Interventions
Intervention(s)
For treated individuals, RIP Medical Debt will purchase all observed medical debt in collections held by First Financial Asset Management (FFAM), and then retire that debt from collections. We will mail subjects letters informing them of the source and dollar amount of medical debt that was abolished.
Intervention Start Date
2018-08-30
Intervention End Date
2019-06-30
Primary Outcomes
Primary Outcomes (end points)
Number of accounts past due
Primary Outcomes (explanation)
Count of tradelines with payments 30+ days past due
Secondary Outcomes
Secondary Outcomes (end points)
1. Collections domain (“first stage”)

a. At least one debt in collection
Definition: Indicator for at least one collection item

b. Number of debts in collection
Definition: Count of collections items

c. Amount of debt in collections
Definition: Sum of debt in collections

2. Non-medical financial distress domain

a. At least one account past due
Definition: Indicator for at least one (non-medical) tradeline 30+ days past due

b. At least one account in default
Definition: Indicator for at least one (non-medical) tradeline 90+ days past due

c. Number of accounts in default
Definition: Count of (non-medical) tradelines with payments 90+ days past due

d. Account balances past due
Definition: Sum of account balances for (non-medical) tradelines with payments 30+ days past due

e. Account balances in default
Definition: Sum of account balances for (non-medical) tradelines with payments 90+ days past due

3. Public records domain

a. Chapter 7 bankruptcy in last 12 months
Definition: Indicator for Chapter 7 filing in last 12 months

b. Chapter 13 bankruptcy in last 12 months
Definition: Indicator for Chapter 13 filing in last 12 months

c. Bankruptcy in last 12 months (aggregate measure)
Definition: Indicator for bankruptcy filing in last 12 months

4. Credit supply domain

a. Credit score (conditional on having one)
Definition: Vantage Score (or if not available most widely used credit score available)

b. Credit score indicator
Definition: Indicator for having credit score used in 4a

c. Credit limits
Definition: Sum of credit limits across credit cards

5. Unsecured borrowing domain

a. At least one credit card
Definition: Indicator for at least one credit card

b. Number of credit cards
Definition: Number of credit card accounts

c. Credit card balances
Definition: Sum of credit card balances

6. Secured borrowing domain

a. Number of mortgages
Definition: Number of mortgages

b. Number of auto loans
Definition: Number of auto loans

c. Mortgage balances
Definition: Sum of mortgage balances

d. Auto loan balances
Definition: Sum of auto loan balances
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
We are conducting a randomized-controlled trial (RCT) to estimate the impact of medical debt forgiveness on measures of financial well-being. Individuals are randomly assigned to one of two arms:

Control: No contact is made with debtors, and no action is taken on medical debt, by researchers; ongoing collections, to the extent that they occur, proceed as normal. The control arm captures status quo interactions with debt collections.

Treatment: For these subjects, RIP Medical Debt will purchase all observed medical debt in collections held by First Financial Asset Management (FFAM), and then retire that debt from collections. We will mail subjects letters informing them of the source and dollar amount of medical debt that was abolished.
Experimental Design Details
Not available
Randomization Method
Randomization done by a computer
Randomization Unit
Individual X debt buy
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
Debt purchases are ongoing. Final sample size will be determined based on available funding to purchase debt.
Sample size: planned number of observations
Debt purchases are ongoing. Final sample size will be determined based on available funding to purchase debt.
Sample size (or number of clusters) by treatment arms
Debt purchases are ongoing. Final sample size will be determined based on available funding to purchase debt.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

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