Wayne County has embarked on an ambitious partnership with RIP Medical Debt, a national nonprofit organization, aiming to alleviate up to $700 million in medical debt for eligible residents. The collaboration, sanctioned by the Wayne County Commissioners last week through an approved contract, targets to benefit as many as 300,000 individuals within the county.
In the United States, the issue of medical debt is widespread, affecting one in 12 adults, which equates to approximately 12 million people, as reported by the Peterson Center on Healthcare and KFF. This persists despite the majority of Americans being covered by some form of health insurance. The economic strain of medical debt compels individuals to reduce their expenditure on essentials such as food, clothing, and household necessities. Specifically, in Michigan, around 690,000 people, or 9% of adults, find themselves grappling with medical debt annually.
Within Wayne County, the scenario is particularly grim, with 13% of individuals holding a credit bureau record also having medical debt in collections, as per findings from the Urban Institute. The median value of medical debt in collections stands at $397.
RIP Medical Debt has been instrumental in relieving over $10.4 billion in medical debt across 7 million families since its inception in 2014. The organization’s approach involves purchasing bulk medical debt from hospitals, physician groups, and debt collectors at a fraction of the cost. Subsequently, the nonprofit takes ownership of the debt and absolves it, notifying the indebted individuals of their newly liberated financial status. Remarkably, each dollar donated to RIP translates to a $100 reduction in medical debt.
The Wayne County initiative will be supported by a $5 million contract spanning two years, with an option to extend for an additional two years. The funding is sourced from Wayne County’s indigent health fund, supplemented by allocations from the American Rescue Plan Act, a response to the pandemic’s economic fallout.
This initiative is not without precedent in Michigan; both Oakland and Kalamazoo counties have previously engaged with RIP Medical Debt to facilitate debt relief for their residents, with ongoing efforts to deliver on this front. Moreover, the nonprofit has extended its services to local governments in Ohio, New York, and Illinois, working alongside entities like Access Health in Muskegon to provide similar relief.
Eligibility for this program is determined by income levels, with Wayne County residents earning less than 400% of the federal poverty level, or $103,280 for a three-member family, qualifying. Additionally, individuals whose medical debt exceeds 5% of their annual income are also eligible. The process is streamlined as there is no need for residents to apply; RIP Medical Debt will collaborate with healthcare providers to acquire the debt and identify qualifying individuals.
Those deemed eligible can anticipate receiving communication from RIP Medical Debt, informing them of the elimination of their medical debt. The organization is currently in the process of finalizing its contract with Wayne County and establishing connections with healthcare providers to purchase the debt. This preparatory phase is expected to last a minimum of six months before residents begin receiving notices of their cleared medical debt, marking a significant step towards financial relief and stability for many within the county.
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