County’s Debt Relief Program No Laughing Matter

If if weren’t for comedian John Oliver, there probably wouldn’t be an innovative Milwaukee County program to erase $153 million in debt for county residents.

It was Oliver who brought attention to a little-known nonprofit charity RIP Medical Debt, which had been founded in 2014 by two Wall Street-savvy businessmen who were debt collectors, Jerry Ashton and Craig Antico. They decided to use their insider knowledge of the industry to help buy medical debts for pennies on the dollar and then forgive them.

In 2016, the New York-based group was featured on Oliver’s weekly HBO series, as he teamed up with its leaders to relieve nearly $15 million worth of medical debt for around 9,000 people — which was a new giveaway record for American television. “That’s when things really took off” for RIP Medical Debt, as the group’s spokesperson Daniel Lempert told Urban Milwaukee.

Three Milwaukee-area viewers happened to see that show or a repeat of it and were inspired to seek change. One was Mequon resident David Eager, who had a longtime career in the healthcare industry, including 20 years for Aurora Health Care, and as a chief financial officer was very familiar with the issue of medical debt. In 2020, after he had retired, he called RIP Medical Debt to offer his services. His call came at just the right time for the group. RIP had for years bought up debt held by collection agencies, but in 2020 got permission from the federal government to acquire debts directly from hospitals and physician groups. Eager was asked to help the group by making presentations to health care systems.

Typically, Eager says, a hospital may want to sell the older debts, “two year or older,” for a fee that can be as low as $1 per $100 of debt. The debt collection company then hounds those debtors in hopes of collecting enough to make a good profit.

By contrast, RIP Medical Debt buys the debt — paying the going rate in the debt collection industry — for debtors at an income level within 400% of the federal poverty level. It works with a Credit Bureau to determine which debtors fall into this category and then it extinguishes the debt for them.

To pay for buying the debt, “we get donations from individuals, faith-based organizations and foundations,” Eager notes. More recently the group has begun to work with state and local governments and has signed contracts with Cook County, New Orleans and Toledo, Lempert says, with “dozens of municipalities and states interested in similar models.” That includes New Jersey, Connecticut and Pennsylvania. Connecticut is considering a deal where it would spend $20 million, the largest government proposal to date. Cook County has signed a contract to spend $12 million to abolish an estimated $1 billion in debt.

Which brings us to the second Milwaukeean who saw the John Oliver show: Wauwatosa resident and Milwaukee County Supervisor Shawn Rolland, who thought the idea had potential for the county. Rolland, who works in communications and PR for Northwestern Mutual, has always been interested in politics and government. After graduating from Drake University, he worked on a congressional election in Des Moines and served in the Iowa state government. He moved back to metro Milwaukee to start a family and served on the Wauwatosa School Board from 2016 to 2022. In 2020 he was elected to the Milwaukee County Board.

Rolland is a progressive who has supported Milwaukee County Executive David Crowley’s push to make sure county programs are designed to assure there is racial equity in their implementation. “I would say most constituents I’ve heard from agree with this goal,” he told Urban Milwaukee. “I think a lot of Wauwatosa believes in change.”

Rolland is a big believer in making “data-driven decisions” and notes that his district has many college educated residents who want to see strategic decision making. “We have a lot of supervisors who are into the details. I’m more interested in the big picture.” And he saw RIP Medical Debt as something with great potential to get a big return from the county’s federal ARPA pandemic funding.

“Serendipitously,” Rolland notes, he got called around that time by a Wauwatosa aldermen he knew, Andrew Meindl, who had also seen the John Oliver show and had made contact with RIP Medical Debt. “He said why don’t we get a meeting together with them.”

Rolland and Meindl met with Eager and Keith Hearle, a special advisor and staff member for RIP Medical Debt to explore whether the group was willing to work with Milwaukee County and the city of Wauwatosa. The answer was yes.

Meawhile Rolland had meetings with members of the Crowley administration to see if the county executive had an interest in the program. The idea wasn’t rejected, but Bess Earl, a senior grant analyst for the county, cautioned that they already had “a lot of ideas” for how to spend the ARPA money, Rolland recalls. “I said that’s fine, let’s score the idea and see how it compares to the others.”

Of course no other idea had a 100-to-1 return and the Crowley administration soon endorsed the idea. Next Rolland introduced a proposal to use $1.6 million of the county’s APPA money to erase $153 million in medical debt for poorer residents of Milwaukee County.

And then something odd happened. When the proposal came before the county board’s finance committee, there were amendments proposed that would have significantly reduced its impact, as Urban Milwaukee reported. And the proposals came not from the board’s few conservatives, but from liberals. The two socialists on the board, Juan Miguel Martinez and Ryan Clancy, would have stripped $500,000 from the project, mostly to spend on medical-debt lawsuits with an unknown impact, and thereby reducing the amount of debt that the county could abolish by approximately $50 million.

And liberal Sup. Peter Burgelis came up with an amendment that substituted the approach used by the experts at RIP Medical Debt with his own formula, preventing any funds from being used on debt that is at least five years old and less than $500. Eager, who attended the meeting, responded to this, noting that typically medical debt of $500 or less was physician debt — given the high cost of health system bills  — and that such debt can dissuade people from accessing primary care; and even after being removed from a credit report the debt still exists and is legally owed.

It was not necessarily a given that the board would approve Rolland’s proposal. Just two months earlier the Wauwatosa Common Council voted down a proposal by Meindl to spend $5,000 from the unused portion of the council’s Professional Development Budget to retire $300,000 in medical debt for residents of the city. The council was evenly divided on the issue, with Wauwatosa Mayor Dennis McBride casting the tie-breaking “no,” making it a 9-8 vote against the proposal.

So the amendments by the three liberals weren’t helpful to Rolland’s cause. Earl told the committee that the Burgelis proposal would make it far more challenging for RIP Medical Debt. And Rolland offered a diplomatic caution to the committee. “This is somewhat of a delicate dance we’re doing,” Rolland said, noting that adding more complexity to the project could cause the healthcare systems, which they must negotiate with on purchasing debts, to walk away from a deal.

In the end the Finance Committee voted for the proposal, without the amendments, with Burgelis and Miguel Martinez voting yes (Clancy doesn’t serve on the committee) and all three voting for it when it gained full board approval.

Rolland, ever the diplomat, refused to offer any criticism of the three supervisors. “I think it was actually okay,” he says. “Not all the ideas are going to be the best ideas. And then, hey, they get voted down. That’s democracy.”

In Wauwatosa, Meindl has created a website to solicit private donations to retire the medical debt of an estimated 2,500 residents of the city facing this problem. To date it has raised $849 toward a goal of $10,000.

Meanwhile, RIP Medical Debt just keeps rolling along: to date it has wiped out $8,5 billion in medical debt for nearly 5.5 million families in America. Milwaukee County’s plan will add to that total.