Kalamazoo County Budget Pays RIP Medical Debt To Extinguish Residents' Medical Debts

RIP Medical Debt will acquire $ 89 million in Kalamazoo County residents' medical debt for only $ 466,000 according to the budget plan:

https://www.mlive.com/news/kalamazoo/2023/10/michigan-county-plans-to-erase-89m-in-medical-debt-for-38k-residents.html

Michigan county plans to erase $89M in medical debt for 38K residents
By Brad Devereaux | October 6, 2023

KALAMAZOO, MI -- Kalamazoo County is preparing to approve its 2024 budget, which includes a line item of $466,000 to wipe out an estimated $89 million in medical debt held by residents.

The Kalamazoo County Board of Commissioners has discussed the 2024 budget for multiple meetings and on Tuesday, Oct. 4, voted to set Oct. 17 as the date to adopt the budget.

The 2024 proposed budget includes $352 million in total revenues, and the same amount for expenditures. Taxes represent the highest category of revenue, making up about 27%.

It is an overall decrease compared to the 2023 budget, which called for $393 million in revenues and expenditures.

Expenditures in the county’s primary funds will be $131.4 million, which is a 9.25% increase in appropriations from last year’s $120.3 million. Primary funds are the general fund, law enforcement fund, parks fund, friend of the court fund, health fund, child care fund.

Budget priorities include employees, Diversity, Equity and Inclusion and transformational community projects, the budget document states.

New medical debt relief initiative

The medical debt relief is a new initiative proposed this year that came from board discussions on how to spend the remaining federal stimulus money.

At the Sept. 19 Committee of the Whole meeting, Commissioner Jen Strebs said the initiative would be a low administrative burden because the national nonprofit RIP Medical Debt would administer it and negotiate with health systems locally.

Medical debt is the number one reason for bankruptcy and it prevents people from obtaining housing or repairing their home, Strebs said.

Public Information Officer Taylor Koopman said RIP Medical Debt would be able to acquire the $89 million in medical debt for much less, which is why the county would only have to pay $466,000.

“The nonprofit works to settle the debt at a lower rate, and would essentially be pennies on the dollar,” Koopman said.

The program would benefit people at 400% of the poverty level and below and would wipe out $89 million in old medical bills tax free, Strebs said. The program would impact 38,300 people in Kalamazoo County, Strebs said. It would be funded using stimulus funds the county received from the federal government.

Commissioners received an email from resident Tom Noall opposing the initiative.

“I do not pay taxes to have them used to pay off private debt. I also don’t want any leftover COVID funds used in this way,” Noall wrote. “Our roads are deteriorating, our water systems need updating, crime is out of control, etc.”

The proposed budget also includes new funding, using federal stimulus funds, for a $150,000 employee emergency relief fund pilot program, a $50,000 foreclosure prevention fund pilot program and $480,000 for a childcare assistance pilot program.

The next commission meeting is Oct. 17 and approval of the 2024 budget is expected to be on the agenda.

Interesting that only 27% of Kalamazoo County's expenditures are paid for by taxes on County residents.  Wonder what they will do when all the COVID stimulus funds are exhausted.