Proposal To Eliminate Medical Debt Won’t Move Forward

Aurora Sinai Medical Center. Photo by Jeramey Jannene.

A plan to erase approximately $153 million in medical debt for Milwaukee County residents will not be moving forward.

Earlier this year, the Milwaukee County Board of Supervisors passed a resolution that was supposed to leverage $1.6 million in federal aid to eliminate $153 million in medical debt. The county was to partner with a non-profit called RIP Medical Debt, which would pay pennies on the dollar to acquire bundles of medical debt in order to abolish it.

But, after months of meetings, county officials have secured a commitment from the healthcare systems that could lead to a greater number of county residents having their medical expenses forgiven before it turns into debt.

The debt relief plan was to have RIP Medical Debt target medical debt for Milwaukee County families making 400% or less of the federal poverty level in Milwaukee County ($55,000 for an individual, $110,000 for a family of four). Anyone whose medical debt is equivalent to 5% or more of their household income would also have been eligible.

But the four major medical systems in Milwaukee County — Froedtert Health, Advocate Aurora Health, Ascension and Children’s Wisconsin — declined to work with RIP Medical debt.

“The Reducing Medical Debt project will not be implemented due to hospital systems expressing a preference to promote their charity care programs,” Shakita LaGrant-McClain, director of the Department of Health and Human Services (DHHS) wrote in a report, “which would also address medical debt concerns targeted by the ARPA project.”

These charity care programs forgive all hospital expenses for patients who are below 250-300% of the federal poverty level, and offer sliding-scale discounts for patients making up to 400% of the federal poverty level.

During discussions of the various charity care programs, it came up that Advocate Aurora had automated its program, screening every patient for eligibility and enrolling them in charity care if they met the criteria. Instead of a bill, Advocate Aurora sends patients a letter explaining that they qualified for charity care.

“After robust discussions, the health systems resolved to thoroughly research and/or adopt supportive technology to automatically enroll qualifying uninsured patients in their charity care programs – without any action required by eligible patients,” Sup. Shawn Rolland wrote in a memo to a county task force.

Rolland championed the medical debt abolishment project. He first secured a funding recommendation from the county’s American Rescue Plan Act (ARPA) Task Force, then passage by the full county board.

Froedtert will implement an automated system beginning Jan. 1; Ascension plans to continue using “financial counseling” during initial contact with a patient, but will use technology to identify patients that qualify for charity care; Children’s Wisconsin will continue to push Medicaid enrollment prior to charity care, as all children at or below 300% the federal poverty level are eligible for Badger Care and the health system is “evaluating options for automated enrollment in its financial assistance program,” Rolland wrote.

It was “impactful,” Rolland told Urban Milwaukee, that Advocate Aurora was already running an automatic charity care program. “And as we looked at that model, we thought wouldn’t it be great if that model was the model that every health system had?” he said.

Rolland would have liked to move forward with the abolition program, but, he said, “I think there is a lot for people in need, and their families to celebrate in this.” In his memo, he noted that an “attractive feature” of the initial debt program was that county residents would have their debt abolished automatically.

Expanding charity care would mean long-term, sustainable reduction in medical debt, Rolland said. “The best way to eliminate medical debt is to prevent it from occurring in the first place.”

The supervisor said he doesn’t think the possibility of working with RIP Medical Debt to abolish debt in Milwaukee County is over. Though, the specific proposal he pushed earlier this year certainly is. The ARPA funding must be encumbered by the end of 2024 and spent by the end of 2026.

“I feel like we moved the ball as far as we possibly could in 2023,” Rolland said. “I’m always optimistic that people will be able to move the ball further and further as time goes on, but in terms of helping Milwaukee County residents to mitigate their medical debt, in 2023, I think we got the best possible deal that we could get with our partners.”