Michigan took another step Monday in its effort to eliminate medical debt for thousands of residents.
The state announced it would wipe out $74 million in medical debt for 71,871 individuals. It鈥檚 the second round of a program that , when the state said it would help residents erase more than $144 million in medical debt.
The move comes amid a bipartisan push to offer patients more protections from collections by keeping them from going underwater on their hospital bills.
Officials say more than $200 million in medical debt has been forgiven for roughly 280,000 Michiganders since the program launched last year.
About 1 in 11 adults in Michigan 鈥� about 690,000 people 鈥� report having at least $250 in medical debt, according to a published in April.
Gov. Gretchen Whitmer, who approved allocating $4.5 million toward medical debt forgiveness in the 2024 budget, said the latest development 鈥渆nsures fewer Michigan families must choose between putting food on the table or paying their medical bills, at a time when so many already are struggling with rising costs on the essentials driven by tariffs, cuts to Medicaid, and the Iran War.鈥�
The state is working with Undue Medical Debt to administer the relief. Leadership at the nonprofit organization say they have separate programs with Kalamazoo, Oakland and Wayne counties where they鈥檝e been able to erase an additional $80 million in medical debt.
Daniel Lempert, Undue鈥檚 vice president of communication and marketing, says the nonprofit is able to relieve $100 of medical debt for every dollar received by the organization.
鈥淢edical debt is a very unique kind of debt,鈥� Lempert told Bridge Michigan. 鈥淲e basically approach hospitals, physicians groups, ambulance companies, anyone who owns medical debt that鈥檚 unpaid, and we buy it in bulk for pennies or less on the dollar.鈥�
The 鈥榬ipple effects鈥� of debt
The state鈥檚 relief program may come too late to alleviate the central crises people face because of medical debt, according to Citizens Research Council of Michigan health policy research associate Karley Abramson.
Medical debt 鈥渉as an impact on their credit scores, and some go into bankruptcy, and then they have to delay care, and that leads to even more expensive care down the road,鈥� Abramson told Bridge. 鈥淭here鈥檚 only so much that the forgiveness can do after the fact.鈥�
While medical debt relief offers a pathway to financial stability, Abramson says lawmakers should focus on front-end policies to prevent the 鈥渞ipple effects鈥� caused by obtaining medical debt in the first place.
, she said, including mandated financial assistance and payment plans for certain patients, caps on medical debt interest rates, lawsuit protections and hospital reporting requirements.
Debt issues are only expected to compound, Abramson said, as more people lose access to health insurance due to rising costs and the , and Medicaid amid .
鈥淓verything with health care is always overlapping with other things that are going on,鈥� she said.
Undue鈥檚 Lempert agrees on the need for broader policy reform amid the federal changes. He contends that medical debt forgiveness can offer emotional relief in addition to the removal of a major financial pressure. 鈥淲e really see it as sort of a one-two punch 鈥� both the merits of the debt relief, and also commitment to upstream policy, work to ideally stymie the creation of new unpayable medical debts.鈥�
State lawmakers are .
In March, the Michigan Senate approved to offer more protections against medical bill collections and the development of payment plans.
The state Senate also passed other bills to establish a 鈥� 鈥� to limit debt collector and creditor communications, in addition to related legislation that would force the state to create a debt relief fund.
The Michigan House is considering . The medical debt bills were voted out of committee Wednesday, June 17, for consideration by the full House.
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