Orange County leaders delay vote on medical debt cancellation initiative

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Orange County Government via Orange TV archives

Orange County Commissioner Nicole Wilson speaks at the board of county commissioners meeting on June 18, 2024.

After initially greenlighting an initiative in February that would leverage federal pandemic relief funds to cancel hundreds of millions of dollars in medical debt for local residents, the Orange County Board of Commissioners delayed Tuesday the vote on final approval of the project.

The decision to delay the initiative initially championed by local community organizers came after several commissioners raised questions about the logistics of the process and expressed concerns about whether their investment would have a truly meaningful impact.

A departmental administrator was able to answer a few questions. But Undue Medical Debt, the nonprofit the county would work with on the project, did not designate a representative available at the meeting to respond to others.

This ultimately made some commissioners uncomfortable about taking a vote.

“We are doing the right thing here. We pay this debt. How does this actually affect our residents’ credit scores and reports? » asked County Commissioner Nicole Wilson, who expressed concern that the process would be inconsistent with how the debt collection process works. “I want to be able to hear from them (undue medical debt) and see that before I sign.”

When reached for comment, the nonprofit’s vice president of communications, Daniel Lempert, said Orlando Weekly that they offered to participate virtually in Tuesday’s meeting, since their management is based in New York.

“It is our understanding that this was not an option,” Lempert wrote via email.

“We are excited about the opportunity to facilitate medical debt relief for eligible Orange County residents,” Lampert continued, “and we will make ourselves available in the near future to answer any lingering questions the county council and hopefully finalize the contract. »

Undue Medical Debt, a nonprofit organization formerly known as RIP Medical Debt, has worked with states, municipalities and health systems across the country to literally buy back medical debt for pennies on the dollar and repay.

The nonprofit, based in New York, was founded in 2014 by former debt collectors who wanted to contribute to a solution to the devastating problem they saw in collections.

Over the past decade, the nonprofit claims to have erased more than $12 billion in debt for more than 7 million families. Each dollar donated erases an average of $100 in debt, according to the nonprofit.

Orange County commissioners gave initial approval to a $4.5 million investment in the initiative in February, which would be funded entirely by unspent federal dollars received by the county under American Rescue Plan Act.

According to county documents, that $4.5 million would be able to wipe out about $424 million in medical debt for about 154,593 eligible Orange County residents.

Under the plan already developed by county staff, those whose medical debt has been erased would be notified by the nonprofit that their debt has been erased (thanks to an investment by the county). According to Undue Medical Debt, residents would also be notified that their negative credit scores associated with the debt would be removed.

Additionally, according to county documents, the nonprofit would also include information on “how to access charity hospital care, free or low-cost medical care, and free financial assistance,” as part of ‘a mitigation strategy aimed at preventing future debt problems.

Central Florida Jobs With Justice, a coalition of labor, faith and advocacy groups, first presented the idea to Orange County commissioners as a community initiative. Orange County residents also shared their own stories about how medical debt has personally impacted them.

“When I think about a life without medical debt, I don’t think about buying a luxury car or going to a nice restaurant,” wrote Eimar Roy, local resident and Central Florida Jobs With Justice volunteer, in a recent op-ed For Orlando Weekly in support of the initiative.

“I think about the people who swiped their cards for me at the grocery store when my transaction was declined, and I think about paying it forward,” continued Roy, who struggled during the COVID-19 pandemic after having found herself unemployed and then having contracted a contract. COVID-19, exacerbating pre-existing medical conditions.

“I think about how much more present I could be to all the beauty and goodness this life has to offer if my mind wasn’t constantly wracked with worry about my home being foreclosed on.”

But, despite the fact that states like Connecticut and New Jersey and municipalities like Cook County, Chicago and New Orleans have already worked with Undue Medical Debt on similar initiatives for their own communities, Wilson and Commissioner Mayra Uribe hesitated to make a final decision.

The nonprofit’s process of purchasing and eliminating residents’ medical debt involves purchasing debt directly from hospital systems and other health care providers.

According to the county, two large local hospital systems – Orlando Health and AdventHealth – have already indicated they are willing to participate.

But both Uribe and Wilson expressed concern about whether this process would help people whose debt has already been sent to collections, and what the initiative can realistically accomplish.

“Those debts have already been sold,” Wilson said. “People who receive notifications now receive them from a third-party provider. This is off the books of Advent Health and Orlando Health.

County Administrator Warren Lakhan, who made a presentation to commissioners on the initiative Tuesday, sought to allay her concerns, sharing that hospital systems often still hold that debt, but Wilson felt she had no not enough information from the nonprofit they would partner with. with to make an informed decision.

Commissioners Uribe and Mike Scott, who himself have struggled with medical debt in the past, also questioned whether this investment would live up to its promises or simply serve as a stopgap solution to help a group limited number of people.

Medical debt is a widespread problem and is the leading cause of bankruptcy in the United States. A KFF analysis found that four in 10 American adults report having debt due to medical or dental bills, with Black and Hispanic households disproportionately affected.

One in four adults also say that in the past 12 months they skipped or postponed getting the health care they needed because of the cost.

While more than 90 percent of the U.S. population has some form of health insurance, insurance coverage alone may be insufficient to cover the cost of a major medical procedure, treatment against cancer or chronic illness. The United States, to date, is the only industrialized country that does not guarantee health care to its citizens through universal health coverage.

Bad medical debt advocates have openly admitted that clearing people’s medical debts would not necessarily prevent future problems with medical bills or other affordability issues.

“What we’re doing doesn’t solve the problem, but it takes some of the burden off,” Allison Sesso, the nonprofit’s president and CEO, said recently. The Guardianafter the publication of a study indicating that the impact of medical debt clearance may be limited.

A medical debt forgiveness program in Orange County would, at the very least, be fairly straightforward for residents. There would be no application process needed to clear the debt, eliminating any concerns about ensuring those with the highest debt are aware of the program.

By working with hospital systems, Undue Medical Debt would be able to identify those with debt, pay it off, and then notify those individuals.

Those who are eligible would include people who have experienced negative economic impacts caused by the COVID-19 pandemic and those who are low-income (living in a household with income at or below 400% of the federal poverty level). or who have medical debt that equals or exceeds 5 percent of their total household income.

For reference, 400% of the federal poverty level in 2024 is $60,240 for a one-person household, or $103,280 for a three-person household.

A proposed $4.5 million investment would eliminate an estimated $424 million in medical debt for more than 150,000 Orange County residents.

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The proposed program in Orange County would be a two-year project extending through September 30, 2026, if approved, overseen by the Orange County Comptroller’s Office and the Department of Community and Family Services .

Ultimately, the board of county commissioners opted to delay a final approval vote on the $4.5 million settlement with Undue Medical Debt on Tuesday, in order to get more information to address concerns commissioners.

Mayor Jerry Demings did not seem excited about the delay, but was receptive to the concerns of his fellow board members. “It’s not that we don’t support the medical debt relief program. What we want to make sure is that people affected by COVID-19 have a positive result with their credit score and that their debt is actually relieved.

Central Florida Jobs With Justice, which initially asked the county for an $8.7 million investment to erase an estimated $827 million in medical debt for 300,000 local residents, did not immediately respond to our request for comment on the vote delayed.

The board gave no details on when a final vote might take place. Orange County, which received a total of $270.8 million in funds through the American Rescue Plan Act, still had about $23 million to allocate in February, with limited time to do so .

Under spending rules, the county must have all of its funding financially committed by the end of 2024 and ensure it is fully spent by the end of 2026.

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