Oakland Co. teams up with nonprofit to help 80K residents with medical debt

Royal Oak — Oakland County residents grappling with medical debt will now have some recourse under a program announced Thursday.

The county will work with RIP Medical Debt, a national nonprofit, to purchase and eliminate the medical debt of up to 80,000 residents for a fraction of its cost, Executive Dave Coulter announced at a news conference.

The Board of Commissioners approved a plan to use $2 million of its American Rescue Plan Act funds to purchase $200 million in medical debt through RIP Medical Debt. The organization acquires medical debt for people experiencing financial hardship, wiping it clean with no consequences for recipients.

The nonprofit is funded by donations from state and local governments, individual donors, philanthropic organizations, and faith-based organizations, and leverage these funds to work with hospitals and buy large bundles of debt from them directly.

Roughly 114,000 Oakland County residents have medical debt, despite the area's wealth, Coulter said. Oakland County Commissioner Charlie Cavell and Deputy County Executive Madiha Tariq joined Coulter at Gilda’s Club in Royal Oak to announced the program.

"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."

Michigan residents who earn less than four times the federal poverty level or for whom a debt is 5% or more of their annual income are eligible for help. Residents do not have to apply for the service, Coulter said. Since RIP Medical Debt works directly with hospitals, if Oakland residents are in the medical system, the organization will find and notify them through the mail.

To date, RIP Medical Debt has abolished $10 million that belonged to 6.8 million people across the country, Tariq said.

"Families delay care when they have debt because they fear going to a healthcare setting," Tariq said. "And it widens the health disparity gaps that exist in our communities because guess what? Medical death disproportionately impacts communities of color, rural communities (and) medically underserved communities."

Cavell, who represents Oakland's 19th district from Ferndale to Birmingham, said he was saddled with medical debt for seven years after contracting Giardia in Haiti and spending the night in a Florida hospital without health insurance.

"For the next seven years, I had to... either find $6,000, or what ended up happening for me is I lived in apartments where they didn't check your credit," Cavell said. "I didn't own my first car until I was 28... because you can't do a get a car loan because they pull your credit. I had a Metro PCS phone that was $40 a month."

The ripple effects of medical debt are familiar to many families, Cavell said. While he was uninsured, the vast majority of people with medical debt are employed and do have health insurance, Cavell said. They just can't handle the cost of a surprise medical emergency.

RIP Medical Debt is already helping Michigan residents such as Kyra Taylor, 34, of Detroit. Taylor was diagnosed with diabetes at age 10 and lost her health insurance when she turned 18 because her job at the time didn't offer it. Between the cost of rent and other bills Taylor couldn't afford critical medications and began accumulating medical debt.

"My bills started piling up," Taylor said at the news conference Thursday. "It was getting to the point where they were leaving letters on my door. ... I was in the ICU (intensive care unit) one time and they was calling my mom trying to get it to get a bill paid."

The situation got so dire that Taylor actually hired an attorney to file for bankruptcy, when she unexpectedly received a letter from RIP Medical Debt informing her that her debt had been paid.

"This has given me my life back," Taylor said.

Oakland County residents who are eligible can expect to start seeing letters from RIP Medical debt next year, Tariq said. It will likely take six months for the organization to establish relationships with the hospitals.

The county plans to work with all major health systems in it, but residents' debts at hospitals outside of Oakland can still be eliminated through the program, Coulter said.

hmackay@detroitnews.com