Program aims to eliminate $700M in medical debt for Wayne County residents

BY JON KING, MICHIGAN ADVANCE

MICHIGAN—A new program to provide relief from medical debt was announced Thursday by Wayne County Executive Warren C. Evans, who said it had caused financial hardship for up to 300,000 county residents.

“I am pleased to have the opportunity to implement a program that could help lift the burden of medical debt that has weighed so heavily on some of our residents. Many cannot afford to pay the growing medical bills they face,” said Evans. “It could help them gain financial stability and eliminate the stress of trying to figure out how to pay overwhelming hospital bills.” 

According to a release, Wayne County teamed up with RIP Medical Debt, a national nonprofit organization, that will work with healthcare providers including hospitals, health systems, and physicians groups to find ways to alleviate up to $700 million in medical debt for affected residents.

The program is funded via the American Rescue Plan Act (ARPA) and does not require residents to apply as long as those with medical debt earn at or below four times the federal poverty level or have debts that are 5% or more of their annual income.

RIP identifies individuals who meet that criteria and then negotiates with health care providers on their behalf to buy the debt in batches. Once that process is complete, RIP sends residents a letter indicating their debt has been eliminated.

Medical debt is the leading cause of bankruptcies in the United States, with more than 2 out of 5 American adults having some. U.S. Census Bureau data indicates that nearly a quarter of households with children have unpaid health care bills, compared with 17% of those without children.

In fact, a 2022 report by the Consumer Financial Protection Bureau found that a one-time or short-term expense such as a hospital stay causes about two-thirds of all medical debt.

“Nobody takes on medical debt willingly. They do so because illness or injury drove them to it,” said Dr. Abdul El-Sayed, director of Wayne County’s Department of Health, Human and Veterans Services. “For many Wayne County residents, that destroyed their credit, leading to mortgages denied and opportunities missed. With this courageous step, Wayne County is stepping in to end that.”

Wayne County joins several other states and municipalities that have used public money to purchase and forgive millions of dollars of their residents’ medical debt, a decision that has public support. A 2022 poll from YouGov found two-thirds of Americans support government relief for medical debt, making it more popular than relief for other types of debt, including for student loans.

“We’re excited to be standing up our program with Wayne County to relieve the local community of burdensome medical debt,” said RIP Medical Debt CEO and President Allison Sesso. “This collaboration is poised to help those least able to repay their medical debts and relieve a major obstacle to financial and mental well-being.  As we secure medical debts to be erased there will be announcements to the community that debt relief letters are imminent.”

READ MORE: Oakland Co. will erase $200M in medical debt for residents using funds from Biden administration

This coverage was republished from Michigan Advance pursuant to a Creative Commons license.