In the past two years, at least five Michigan counties have worked with a non-profit to help erase some residents’ medical debt.
The counties partner with the group Undue Medical Debt. They subsidize that group’s work in buying up medical debt at a fraction of the initial cost, forgiving it, and notifying residents that they’ve done so.
Wayne and Oakland counties recently announced they’re already wiped out about $36 million in medical debt for potentially tens of thousands of residents. Ingham, Kalamazoo, and Muskegon counties are also running similar programs with Undue Medical Debt, previously known as RIP Medical Debt.
Karley Abramson, a researcher with the Citizens’ Research Council of Michigan, said such debt forgiveness programs are a good start.
But Abramson said Michigan should be doing more to limit medical debt in the first place, as some other Midwestern states have done. That’s because this type of debt relief generally happens late in the process, after the debt has already had negative effects on patients’ finances, and possibly on their health as well.
“It's a piece that is helpful. It's a piece that is probably needed, but it is only going to do so much on its own,” Abramson said.
Abramson said some other states have tackled medical debt by facilitating or mandating that hospitals offer affordable payment plans, capping interest rates, or limiting the actions of collections agencies when it comes to medical debt.
Michigan, on the other hand, “doesn’t really have these policies,” Abramson said. The state did recently appropriate $4.5 million to assist with medical debt forgiveness initiatives, “but that’s about all they’ve done.”
Abramson noted that any attempts to regulate medical debt would surely face pushback from hospitals and the insurance industry, and that getting something done about it in Lansing “wouldn’t be an easy solution.” But she said it should be on policymakers’ list of priorities, simply because of the nature of of medical debt and the “ripple effects” it can have on people’s lives.
“Medical debt is fundamentally different than other consumer debt,” Abramson said. “This is not a choice for a lot of people. This is not a luxury.”
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