No, John Oliver didn’t buy $15 million of medical debt

We don’t know how much he did buy but we do know it wasn’t $15 million.

He bought it on the secondary market. At some discounted rate. Penny on the dollar? Maybe even less.

Good piece of TV and undoubtedly worth it given the publicity, but $15 million it ain’t.

10 comments on “No, John Oliver didn’t buy $15 million of medical debt

  1. Oh, those that got the debt forgiveness will receive a lovely 1099c form. The amount that is forgiven is now treated as income. Have a day.

  2. He didn’t *pay* $15 million for it, but the debt he bought, assuming he could actually get it all, was $15 million.

    You’re right that he didn’t buy $15 million, as there’s no way he was ever going to be able to collect it all. And I don’t know how these valuations work but if he paid $60k (which is the number I’ve heard) then it certainly wasn’t *valued* at close to $15 million.

    But the original debtors had, in aggregate, taken out $15 million in debt which was repackaged.

  3. If he wants to put his own money where his mouth is then good luck to him. He bought and cancelled debts denominated at $15M – if the price paid is quietly ignored then that’s a bit of spin I don’t begrudge him.

  4. Except Geoff that some other suckers had the bitter pill of losing the actual money.

    If he’d forgiven actual debt of $15 M then it would be different.

  5. If you can buy the debt of 9000 people for $60k wouldn’t it have been more fun for the original debtors to offer to pay it off for $6.67 each?

    I have zero knowledge of the US healthcare system, but if the original owner of the debt was only going to get $6.67 for it, why wouldn’t they offer it to the debtor at that price (plus admin fees of a few hundred bucks) rather than selling it to someone who will presumably just continue to hound poor sick people for money they probably don’t have?

    Is it just that they can’t be seen to be letting so many people get away with their debts?

  6. @ magnusw
    “Is it just that they can’t be seen to be letting so many people get away with their debts?”
    Yes.
    If they did that, the default rate would soar to somewhere a bit below 100% and they would be bankrupted.

  7. Not only did he pay $60k for it, but it was all statute limited debt, so couldn’t be enforced through the courts anyway.

  8. It’s the IRS which is the problem here.

    If a commercial organisation lets you off a debt then the amount they let you off is income to you upon which you must pay income tax. If a charity purchases and forgives a debt then it isn’t.

  9. It’s $15m notional of debt, but not by a long way $15m worth of debt.

    Tim, why don’t you set up a business lending money to the employees of charities? The charities could then buy the debt off you and cancel it. So their staff get their income free of tax. They would therefore be willing to work for lower gross salaries, and the charities could use a small part of their savings to pay a premium for the debt they buy, so you get to make a profit.

  10. If a charity purchases and forgives a debt then it isn’t.

    And one hopes that Oliver’s lawyers were smart enough to understand this, and that the legal entity that forgave the debts did in fact have charitable status. I suspect there is a fair chance of this.

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