Oakland Co. Residents Can Have Medical Debt Erased With New Program

OAKLAND COUNTY, MI — Up to 80,000 Oakland County residents could have their medical debt wiped out thanks to a new county program using federal dollars, county officials announced Thursday at the Gilda’s Club Metro Detroit in Royal Oak.

Oakland County Executive Dave Coulter and the Oakland County Board of Commissioners are partnering with the non-profit organization RIP Medical Debt to use $2 million of the county’s American Rescue Plan Act (ARPA) dollars to buy up to $200 million in medical debt of Oakland County residents for a fraction of its cost, then wipe clean their debt.

"No matter what a person’s circumstances are, a medical crisis can be devastating for them and their families - physically, financially, and emotionally," Oakland County Executive Dave Coulter said. "We should do what we can to help people who find themselves on the brink of bankruptcy due to a health condition or emergency."

Officials said medical debt is the number one source of bankruptcy in the U. S. and is especially prevalent in communities of color and rural areas. Roughly 114,000 Oakland County residents carry medical debt, which averages to $2,500 per household, officials said.

Here's Who Qualifies For The Program

RIP Medical Debt is a non-profit and national organization that acquires and abolishes medical debt for people experiencing financial hardship. The group will work with county officials and local hospitals to identify residents who fit a specific criteria for relief. Only people who earn less than four times the federal poverty level or for whom a debt is five percent or more of one’s annual income.

After identifying people who meet the criteria, RIP Medical Debt, on behalf of the county, will buy the medical debt for pennies on the dollar and abolish it.

Residents cannot apply for the program. Rather, the non-profit will notify people with a branded letter that some or all their debt has been canceled and cleared from their credit reports.

"We know that medical debt is detrimental to health because families delay care when they have debt which increases the burden of disease in communities," Deputy County Executive Madiha Tariq said. "Medical debt is also a huge blow to our economy, impacting the workforce, housing, and deepening the cycle of poverty."

How Debt Elimination Helped One Michigan Resident

Michigan resident Kyra, who lives with the challenges of diabetes, shared her story with news conference attendees. RIP Medical Debt purchased and wiped clean roughly $3,500 of her medical debt.

Kyra was diagnosed with diabetes at age 10, a chronic condition that runs in her family. During her teen years, her family’s medical insurance paid for the management of her condition. As a young adult, she was without medical insurance coverage, accumulating debt and struggling to keep her job.

After RIP Medical Debt purchased and abolished her debt, she was able to move her life forward. Now she is working a job that pays more than she earned when she was under the burden of medical debt.

"Being free from medical debt is a breath of fresh air," Kyra said. "No bothering calls or threatening letters. To be honest, I don't feel overwhelmed anymore and this all happened at the right time."

'I Was Unable To Afford Insurance And Got Sick On A Mission Trip'

Gilda’s Club Metro Detroit, which provides support, education and wellness programming to cancer patients and families, has witnessed the toll of medical debt on their community.

"Financial toxicity is among the top stressors of families facing cancer," CEO of Gilda’s Club Metro Detroit Laura Varon Brown said. "At a time when families have so many complexities and fears weighing on them, how to pay for hope should not be among them."

Oakland County Commissioner Charlie Cavell of Ferndale, representing District 19, has been an advocate for this program at the Board of Commissioners. He voted yes for the program after it won final board approval on Tuesday.

"In my 20s, I was unable to afford insurance and got sick on a mission trip," Cavell said. "I had more than $6,000 in medical debt, which kept me from seeing the doctor, building credit, accessing job opportunities because I could not get a car loan, and more."

"Learning from RIP Medical Debt that there are tens of thousands of families in Oakland County going through the same thing I went through, and then having a solution for their situation was a humbling and transformational experience for me, and something that's been meaningful to bring to my work as a commissioner," he added.