Oakland County hopes to wipe out $200 million of medical debt for residents

OAKLAND COUNTY — Up to $200 million in medical debt for Oakland County residents will be erased through a new partnership with a nonprofit organization.

Oakland County and nonprofit RIP Medical Debt will be using $2 million from the county’s American Rescue Plan Act funding to purchase up to $200 million in medical debt for qualified residents of the county, which possibly could be up to 80,000 people.

According to its website, RIP Medical Debt uses data analytics to “pinpoint the debt of those most in need: households that earn less than 4x the federal poverty level” or whose debts are 5% or more of annual income. The organization buys “debt in bundles, millions of dollars at a time at a fraction of the original cost. This means your donation relieves about 100x its value in medical debt.”

Oakland County Executive Dave Coulter said at a press conference at Gilda’s Club Metro Detroit in Royal Oak Oct. 19 that the county’s health and human services personnel have been looking at ways to increase access to care and to relieve debt for residents.

Coulter stated that when the county uses its American Rescue Plan Act  dollars, he wants it to be transformational. Using $2 million to clear debt on its own could be a drop in the bucket, but using that funding to erase $200 million, he said, is transformational.

“It’s not just the fact that they’re carrying this debt, but this debt impacts other aspects of their lives,” Coulter said. “It ruins your credit score to carry this around. It affects your mental health, frankly. It holds you back to having your most successful opportunities in life. So it’s not just erasing, you know, medical debt for folks, maybe up to 80,000 … Oakland County residents, but I think it’s putting them on a path to a quality of life that they have been held back (from) by this debt. And so we’re really excited to be doing this. I think it’s an important and transformational investment that we’re making.”

Coulter said after the American Rescue Plan Act money is gone, the project will be over, though because this is a nonprofit, there could be ways to keep it going through fundraising opportunities.

The county said this is not a program that residents need to apply for; eligible residents will be notified by RIP Medical Debt if their debt has been eliminated.

According to Deputy Oakland County Executive Madiha Tariq, who oversees the Oakland County Department of Health and Human Services, RIP Medical Debt will analyze which people are most in need, and then a patient’s hospital and the nonprofit will work to determine whether RIP Medical Debt will acquire those debts.

“The people who are impacted, who carry medical debt in this country, are working families,” she said. “Over 50% of people in this country either currently carry medical debt or carried it in the last five or so years. So this issue of medical debt impacts your neighbor, your friend, your teacher, your kids’ schoolteacher, and to be part of it is for us is just an honor and a pleasure. No one should ever have to choose between life and the financial ruin of their family. By eliminating medical debt, we give people the reset they need.”

Tariq stated that people who qualify most likely will start seeing letters next year about their debt being erased.

“Medical debt is a social determinant of health,” she said. “Families delay care when they have debt, because they fear going to a health care setting … and it widens the health disparity gaps that exist in our communities because — guess what? — medical debt disproportionately impacts communities of color, rural communities, medically underserved communities. So this is also a health equity success for us, especially for those of us who are in public health.”

Oakland County Commissioner Charlie Cavell, a Democrat who serves the cities of Berkley, Ferndale, Huntington Woods, Pleasant Ridge and portions of Birmingham and Royal Oak, helped push for this program as he knows the burden of carrying medical debt.

Cavell recalled how he contracted giardia after a mission trip to Haiti years ago and ended up in a Florida emergency room. Cavell didn’t have health insurance, and that one night cost more than $6,000. The debt followed him for years as his credit score took a hit, he said, which led to him living in month-to-month apartments that didn’t check his credit, and he wasn’t able to buy his first car until he was 28 because of his credit.

“There’s lots of ripple effects of medical debt,” he said. “The vast majority of RIP’s work is paying $25 to pay off a $2,500 medical debt, which was incurred because someone had a deductible they cannot afford. And today we’re fixing that.”

Kyra Taylor, of Detroit, has seen firsthand her medical debt wiped clean by the nonprofit.

Taylor, 34, has undergone multiple transplants, receiving two kidneys and a pancreas. She was diagnosed with diabetes at the age of 10 and had her insurance cut off when she was 18. She recounted how she worked at a minimum wage job, but it didn’t offer insurance. Taylor also tried applying for assistance with the state government, but she was told she made too much money.

According to Taylor, her insulin costs $100 a bottle, which lasts three weeks. But because she had to pay rent and her medical bills, she had to cut back on her medicine and use something she wasn’t supposed to be taking that cost less in order to survive.

It didn’t matter, as Taylor put it, because she was drowning in debt. She told C & G Newspapers that she had accumulated “tens of thousands” of dollars in debt.

“My medical debt, it was so high that when I would finish paying what I could pay, rent, the medical debt, so far, I would only be left with like $10. And you can’t do nothing with $10. You can’t buy food, we can’t pay rent, nothing like that,” she said.

At one point, Taylor was in her last steps to file bankruptcy when she received a letter from RIP Medical Debt. She threw the letter away at first but checked it again to see that her medical debt was gone. The organization had purchased and erased $3,600 of her debt.

“This has given me my life back,” she said of her debt being gone. “I can travel, I can go to work, I can pay my bills.”