County Could Erase $153 Million in Medical Debt

Milwaukee County Supervisor Shawn Rolland has authored a resolution that would have the county use approximately $1.6 million to erase $153 million in medical debt for poor residents.

To do this the county would partner with a non-profit based in Long Island, New York called RIP Medical Debt. The organization, which has worked with other counties and municipalities to erase medical debt in the past, purchases bundles of debt at a low-cost and then wipes it away.

Figures being used by RIP Medical debt and a number of local governments that have partnered with them suggest that for every million invested, roughly $100 million or more in debt can be purchased for cancellation. The company was founded by two former debt collection executives, Jerry Ashton and Craig Antico. Its website states that it has wiped out $8.5 billion in medical debt across the U.S.

Rolland’s legislation would have the county use money initially set aside to provide premium pay to corrections officers for the project. The funds come from the county’s allocation of federal stimulus funding from the American Rescue Plan Act (ARPA). The premium pay would instead be funded through the county’s tax levy.

The plan would have the county provide the funds to RIP Medical Debt to make the purchase. Any residents that make between 0% and 400% of the federal poverty level and have medical debt that amounts to 5% or more of their household’s annual income will be eligible for relief. The county could alleviate debt for an estimated 67,000 county residents, according to Rolland’s legislation.

Data compiled by the Urban Institute, a D.C.-based think tank, shows that Milwaukee County is above the national average for the percent of residents with medical debt that has been sent to collection agencies. The percent of Milwaukee and Wisconsin residents of color who have medical debt in collections is more than double that of white residents. Numerous studies in recent decades have found that medical bills and medical debt are the leading causes of personal bankruptcies.

Milwaukee County has been implementing a strategic plan adopted two years ago to make Milwaukee County the healthiest in Wisconsin by eliminating racial disparities in health outcomes. Rolland’s legislation notes that debt and the weight it places on a family’s finances is, in fact, a social determinant of health, affecting their “economic stability and mobility.”

Rolland also references a study by The Sycamore Institute, a nonpartisan public policy researcher in Tennessee, which found medical debt is directly correlated to poorer health as it makes people less likely to access health care.