RIP Medical Debt will acquire $ 89 million in Kalamazoo County residents' medical debt for only $ 466,000 according to the budget plan:
Michigan county plans to erase $89M in medical debt for 38K residents
By Brad Devereaux | October 6, 2023KALAMAZOO, 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.
Oakland County is following Kalamazoo County:
Oakland County plans on using $2M in federal aid to cover medical debt for residents
By Matt Durr - October 20, 2023OAKLAND COUNTY, MI -- Officials in Oakland County say they plan on using a $2 million federal grant to pay off medical debt for county residents, according to the Associated Press. The county will work with the national nonprofit RIP Medical Debt to purchase medical debt for people who can’t afford to pay it themselves.
Oakland County Executive Dave Coulter said that as much as $200 million in debt could be wiped off the books for county residents if the health care providers agree to accept less money to settle the debts. Coulter went on to say that he wants the federal aid “to be transformational.”
The funding comes from a government program that aims to stimulate the economy and improve public health in the aftermath of the COIVD-19 pandemic.
RIP Medical Debt will work with local health care providers in the county to determine which individuals fit the criteria for the program. Residents will not be able to apply for the program, but will be notified if any [p]art of the debt has been settled as part of the plan.
Now Wayne County, with the most expensive medical debt cancellation program yet attempted in Michigan:
Wayne County seeks to wipe away up to $700M in medical debt for 300,000 residents
By Nushrat Rahman - March 13, 2024A new program aims to relieve medical debt for up to 300,000 Wayne County residents.
The county is partnering with the national nonprofit RIP Medical Debt to eliminate as much as $700 million in medical debt for those who are eligible. Last week, Wayne County Commissioners approved a contract to work with the organization.
"We just believe that you shouldn't be strapped with a debt that will ruin your credit, will take away your financial opportunities and create the kind of anxiety that medical debt does for too many people," said Dr. Abdul El-Sayed, director of Wayne County’s Department of Health, Human, and Veterans Services.
One in 12 American adults — or 12 million people — owe medical debt, according to an analysis from the Peterson Center on Healthcare and KFF. Despite the vast majority of the population having some form of health insurance, medical debt is an ongoing problem, forcing people to cut back on how much they spend on food, clothing and household items, researchers said. The report found that about 690,000 people in Michigan, or 9% of adults on average, reported having medical debt in a given year.
About 13% of people with a credit bureau record in Wayne County have medical debt in collections, according to the Urban Institute. The median medical debt in collections is $397.
Detroiter Kyra Taylor, who was diagnosed with diabetes at 10 and has received kidney and pancreas transplants, began seeing her medical bills pile up from emergency room visits, check ups, medication and specialists after she turned 18 and said her insurance was cut off.
Taylor was working at Subway making $700 every two weeks and paying for insulin, while dealing with seizures, hair loss and feeling frail. The highest bill her mother saw was around $50,000, she said. Debt collectors would hound her mother to pay the medical bill even while Taylor was in the hospital. She would come home to be served papers. When she saw a letter from RIP, she thought it was another bill, but it ended up being a major stress relief. In 2019, RIP wiped away most of her medical debt, she said.
"I felt lighter. I was able to go back to the doctor and know that I had a clean slate," Taylor, 35, said.
Here's a rundown of what to know about the first-of-its-kind program in Wayne County:
How the program works
Since 2014, RIP has relieved more than $10.4 billion in medical debt for 7 million families. The nonprofit uses donations to buy medical debt in bulk for "pennies on the dollar" from hospitals, physician practices and debt collectors, according to the organization. Once the group owns the debt, it notifies individuals whose debt it purchased that their medical debt will be erased. One dollar, on average, gets rid of $100 in medical debt, according to RIP.
"The medical system is increasingly complicated for individuals to navigate and so, we're trying to remove this debt for individuals, that really was no fault of their own," said RIP Medical Debt CEO and President Allison Sesso.
The Wayne County program will initially be funded by a $5 million contract for two years, with an optional two year extension, El-Sayed said. Funding comes from Wayne County's indigent health fund and dollars leveraged through the county's use of the pandemic-era American Rescue Plan Act, he said.
Last year, Oakland County and Kalamazoo County partnered with RIP to ease medical debt for thousands of residents, and the relief efforts are still in the works. RIP worked with Access Health in Muskegon to provide medical debt relief. The nonprofit has also worked with local governments in Ohio, New York and Illinois.
Who qualifies
The program is for Wayne County residents who earn less than 400% of the federal poverty level, or $103,280 for a family of three, or whose debt is greater than 5% of their annual income.
People do not need to apply for the program. Instead RIP will work with health care providers to buy the debt and identify who qualifies. Then, the nonprofit will send letters to people letting them know their medical debt has been wiped away.
"They basically get their financial lives back for that decision that they made for fear of losing their actual lives," El-Sayed said.
What residents can expect
Those who qualify for the program will receive a letter from RIP Medical Debt letting them know their medical debt has been erased. RIP needs to finalize a contract with Wayne County and work with health care providers — where it buys debt from — first and that will take at least six months.
"This is a multi-year endeavor, so it's gonna take some time," Sesso said.
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