Fighting Medical Debt: Why We Funded Betterbank

Dorm Room Fund is proud to announce our investment in Betterbank, a company building a checking account that provides a free emergency fund for the everyday American.

When co-founder Saumik Tiwari was injured during a rugby game at Trinity College, the last thing he wanted to think about was how he could cover the medical bills. But a visit to the emergency room demonstrated to him the impact an accident can have on not just a student’s, but on anyone’s, budget.

Saumik found that not only did he have to pay deductibles and co-pays, but that his cost of living had increased after his injury due to transportation and other lifestyle changes. Not to mention the risk that he could not work and could lose his income, leaving him unable to pay rent, utilities, and student loans. The cost of his injury was simply debilitating.

With this experience ingrained in his head, Saumik teamed up with his brother, Kaushik, to dive deeper into the problem of medical debt. The two were astonished by what they found. One in five Americans has overdue medical bills on their credit report. More than half of these medical collections are less than $600, yet 40% of people struggle to scrape together $400 in the event of an emergency. Medical debt is the most frequent cause of bankruptcy in America — more common than credit card debt, car loans, or student loans. The scope of the problem and subsequent risks cannot be overstated: Americans have more than $81 billion in total outstanding medical debt.

Saumik and Kaushik also found…

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Written by Alex Chen, DRF Partner (NYC). Follow him on Medium and Twitter.

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