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Kyra Taylor, who was diagnosed with diabetes at age 10 and has had pancreas and kidney transplants, once was drowning in medical debt. She had to “rub two pennies together” to pay for insulin amid her other bills.
“It was getting to the point where they was leaving letters on my door. And you come home, get off work and you see a letter on your door,” she said through tears. “I was in ICU one time and they was calling my mom; trying to get me to get a bill paid. Calling my mom. I’m about to die, and I’m worried about getting a bill paid.”
About three years ago, the national nonprofit RIP Medical Debt paid off Taylor’s medical debt, giving her her life back. Now, the nonprofit is partnering with Oakland County in a new program to wipe out medical debt for possibly up to 80,000 Oakland County residents who qualify.
County officials said they are allocating $2 million of the county’s American Rescue Plan Act funds for the nonprofit to purchase the residents’ medical debt for pennies on the dollar, then eliminate that medical debt.
County officials hope that up to a total of $200 million in medical debt of its residents will be eliminated, freeing the residents for better lives and improved financial footing.
“I want our ARPA dollars to be transformational,” Oakland County Executive Dave Coulter said during the announcement Thursday at Gilda’s Club Metro Detroit in Royal Oak.
The New York-based nonprofit will work with local health systems on behalf of the county to identify Oakland County residents with unpaid medical bills. Those who qualify will be notified by mail when their medical debts are eliminated.
Here’s who qualifies to have medical debt erased
Residents could start seeing letters as early as next year, said Deputy County Executive Madiha Tariq, who oversees the Health and Human Services Department.
Officials said about 114,000 county residents have medical debt, which is the No. 1 reason for bankruptcy in the U.S. and is prevalent in communities of color, in rural areas and for the medically underserved. They said the average medical debt is $2,500 per household.
RIP Medical Debt acquires and abolishes medical debt for people experiencing financial hardship. People who earn less than four times the federal poverty level or for whom debt is 5% or more of the person’s annual income qualify, the county said in a release.
Once a contract is in place, RIP Medical Debt staff will implement the county’s medical debt elimination program by working with area hospitals to identify residents who fit the criteria. Then, the nonprofit will buy their medical debt for pennies and abolish it.
Tariq said this is the beginning of a “full circle moment” and a “health equity success for us” in public health. She said people with medical debt are working families, many carrying insurance — neighbors, friends, your child’s teacher. Families delay care when they have medical debt letters, increasing the burden of disease, because they are “simply crippled by medical debt.”
Residents cannot apply for the program. RIP Medical Debt will notify people via a branded letter that some or all their debt has been canceled and cleared from their credit reports.
How debt elimination changed her life
Taylor, 34, who lives in Wayne County, said she had her medical debt eliminated about three years ago, shortly before she nearly declared bankruptcy.
Years ago, Taylor worked a minimum wage job that didn’t offer insurance. She said collectors left letters on her door and called her job. One bill was for $6,000 to $7,000. Sometimes, she said, she got up to seven letters a month on her door and in her mailbox. She tried to make payments, she said, but could only afford $20 or $30 at a time.
Taylor said when she got the letter in the mail that stated her medical debt had been paid, she “thought it was fraud, so I put the letter in the trash.”
“The Holy Spirit told me to check again. So I called my attorney, he says: ‘Your medical debt is gone. I don’t know who paid it, but it’s gone,’ ” she recalled.
Taylor said that gave “me my life back.” She could pay other bills and be free of threats to pay her medical debt. Now, she has a full-time job at a mortgage company, attends school and can pay for her classes and care for her 8-year-old son.
The Oakland County Board of Commissioners approved the program in a bipartisan effort, said Commissioner Charlie Cavell, of Ferndale, who in his 20s got sick on a mission trip and had more than $6,000 in medical debt, which kept him from such things as building credit and getting a car loan.
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RIP Medical Debt, founded in 2014 by two former debt collections executives, has acquired and abolished more than $10 billion in medical debt for nearly 7 million people and families, according to its website. The group has received support from state and local governments and donors as well as philanthropic and faith-based organizations.
Tariq said the nonprofit has worked in 25 locales, including Arizona, New Jersey and Cook County, Illinois. Cavell said the group is looking at working in Kalamazoo County, with the state and possibly in Wayne and Ingham counties.
“At a time when families face so many complexities and fears weighing on them, how to pay for hope should not be among those. How wonderful it is that we’re here today to kind of address that and to give them a little bit of hope,” said Laura Varon Brown, executive director and CEO of Gilda’s Club Metro Detroit.
Contact Christina Hall: chall@freepress.com. Follow her on Twitter: @challreporter.
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