How Michigan lawmakers helped turn $4.5M into $450M—and erase debt for 180K people

By Kyle Kaminski

March 21, 2024

State lawmakers earmarked $4.5 million to forgive medical debt. Four months later, those funds have gone on to help erase about $450 million in debt for 180,000 Michiganders.

MICHIGAN—Michiganders shouldn’t have to choose between paying for life-saving health care and putting food on the table to feed their families, said state Sen. Sarah Anthony (D-Lansing).

But with roughly one in three Americans now dealing with unpaid medical bills, it’s a choice that many Michiganders are forced to make everyday. And all too often, Anthony said, they’re deciding to forgo their necessary medical treatment for fear of spiraling further into medical debt.

“Medical debt has been a growing crisis in our state and across the country,” Anthony said. “But in this Legislature, we are motivated to remove barriers and allow people to prosper. One bill at a time, one investment at a time, we will level the playing field for working families in our state.”

Anthony met with local government officials at the state Capitol this week to call attention to a recent bill that she said is providing taxpayers a particularly big bang for their collective buck.

House Bill 4292, which was signed into law on New Year’s Eve by Gov. Gretchen Whitmer, appropriated an additional $276 million for this year’s state budget. That sweeping budget bill included $4.5 million in state grant funding to help eliminate medical debt for Michiganders.

And less than four months since being signed into law, Anthony is now crediting that state funding for going on to help eliminate about $450 million in debt for 180,000 Michiganders.

“This is a true testament of what we can do when we stand together here in Michigan,” she said.

How does it work?

Michigan partnered with RIP Medical Debt, a national nonprofit organization that acquires and abolishes medical debt for people who are struggling to pay their bills. 

With the recent allocation of state funding, federal funds from President Joe Biden’s American Rescue Plan Act (ARPA), and matching funds from local governments, the organization has been able to work with healthcare providers to essentially buy off the medical debt of an estimated 180,000 Michiganders (via secondary markets or directly from providers), and then pay it off for pennies on the dollar—effectively zeroing out the debt for patients altogether.

The legislation that was passed last year (without Republican support) specifically requires the Michigan Department of Health and Human Services to ensure grant recipients used the $4.5 million in state funds only to pay off the debts of low-income residents on the edge of insolvency.

So far, Ingham, Kalamazoo, Kent, Oakland, and Wayne counties have partnered with RIP Medical Debt and secured state funding over the last four months, according to state officials. 

In Oakland County, for example, about 114,000 residents carry an average of $2,500 in medical debt. The county’s partnership with RIP Medical Debt uses both state funds and $2 million of the county’s federal ARPA funding to buy off the medical debt of up to 80,000 residents. A similar program in Wayne County is also set to forgive about $700 million in debt for 300,000 residents.

“I think that’s really significant, but what is more significant, I think, is the cooperation here in the House and the Senate to understand that there are people-issues that we have to deal with—not just other-issues,” said Wayne County Executive Warren Evans. “We’re hitting the ground running. We’re excited, and we’ll piece together funds from other places—but the genesis had to start somewhere, and the work (state lawmakers) did was critically important.”

Studies show about 100 million Americans are saddled with medical debt—and it’s now the leading cause of bankruptcy in the United States, especially within communities of color and rural areas. Estimates from the Kaiser Family Foundation also show that the overall medical debt in the United States surpassed $200 billion, which is almost the size of Greece’s economy.

Other states (like Connecticut, New Jersey, and Pennsylvania) have also deployed similar debt relief programs, in partnership with RIP Medical Debt, to forgive medical debt for their residents.

This week, Anthony said the state funding was intentionally crafted to help lift up the middle class and “real Michiganders”—and not carve out “giveaways and incentives for the wealthy.”

“We wanted to focus on things—on issues—that lift people up out of poverty and give a fair shot to the working and middle class Michiganders across our state,” Anthony said. “This is the work to actually uplift people. … At the end of the day, if we can do more of this, more people-centered work, I believe we’ll actually be proud of the service that we’re embarking on.”

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  • Kyle Kaminski

    Kyle Kaminski is an award-winning investigative journalist with more than a decade of experience covering news across Michigan. Prior to joining The ‘Gander, Kyle worked as the managing editor at City Pulse in Lansing and as a reporter for the Traverse City Record-Eagle.



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