Milwaukee County looks to erase medical debt for 67,000 residents

MILWAUKEE (CBS 58) -- The Milwaukee County Board of Supervisors approved a resolution to forgive $153 million in medical debt at a fraction of the cost.

Milwaukee County is close to donating $1.6 million of American Rescue Plan Act (ARPA) funding to RIP Medical Debt, a non-profit that buys medical debt at a discount.

"I'm really excited for the people living in Milwaukee," RIP Medical Debt President & CEO Allison Sesso said.

For every $100 the county spends, $10,000 worth of debt is abolished, according to RIP Medical Debt.

"This is older medical debt. Medical Debt that has been sitting on the books for a long time. The medical systems have been struggling to collect on it so therefore the value of it comes down," supervisor Shawn Rolland said. 

There isn't an application process for residents. The forgiveness is based on income and the amount of debt owed. 

RIP Medical Debt defines the qualifiers as people who earn less than four times the federal poverty level or those who have debt 5% or higher than their annual income.

"Residents don't have to do anything. In fact, in four or five months the hope is that residents will get a letter in the mail saying your debt has been abolished. Have a great day," Rolland said. 

RIP Medical Debt predicts about 67,000 people will be impacted.

"This can help people countywide that are really struggling with the impact of this debt and hopefully help them bounce back," Rolland said.

The resolution, led by Rolland, passed 15-2 at a meeting on Thursday.

Those who support the resolution said it was a good use of ARPA funds.

"We're really doing I think what the mission of the ARPA funds is by actually helping these people kind of land back on their feet and be able to move forward," supervisor Kathleen Vincent said.

Others said the residents who benefit will see relief in more ways than one.

"It will impact credit scores. It will impact people's well-being and confidence to go back to their physician," supervisor Peter Burgelis said. 

Some of the supervisors who approved the resolution said it wasn't perfect. 

"My concern with this is we're buying the debt from people who have collected the debt and I've spoken to stakeholders in the last few weeks that are concerned that creates a market for debt," supervisor Ryan Clancy said. 

Supervisors Patti Longsdon and Steve Taylor opposed the resolution.

With about 7% of the county benefiting, Longsdon said she sees more inclusive ways to spend federal dollars. 

"I just personally would like to see this money spent in a more diversative way for our county," Longsdon said.

The resolution needs final approval from Milwaukee County Executive David Crowley. He was not available for comment on Friday.