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Tag: Orange County medical debt

  • Orange County wipes out more than a half billion dollars in medical debt

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    As local elected officials scramble to address threats to the social safety net posed by the federal government shutdown, the Orange County government had at least one piece of positive news to share this week.

    Through a partnership with the nonprofit Undue Medical Debt, Orange County announced this week it has managed to relieve a total $515 million in medical debt held by more than 300,000 residents. The county announced an initial round of $472.5 million in debt relief back in May, and the second round of $42.9 million in relief was announced Tuesday.

    “Medical debt is more than a financial burden, it is an emotional weight,” said Sheila Santiago, a local resident who received $7,000 in debt relief. “Having that weight taken off my shoulders allows me to focus my time and attention on my health.”

    The medical debt relief initiative, funded by about $4 million of federal pandemic relief funds distributed under the Biden Administration, was made possible through buying up debt from local hospital systems — such as Orlando Health — and third-party collection agencies. 

    No one formally had to apply for the program. Instead, Undue Medical Debt worked with local hospitals and collection agencies to identify and buy up the debt of qualifying residents. Each dollar invested in the process erases about $100 of medical debt, according to the nonprofit.

    Orange County commissioners first approved a contract with Undue Medical Debt last summer to lead the program, becoming the first county in Florida to do so. Founded in 2014 by former debt collection executives, Undue Medical Debt has partnered with more than two dozen other local state governments across the U.S. — including Arizona, Michigan, and Illinois — to wipe out medical debt for pennies on the dollar.

    “We’re thrilled to continue our partnership with Orange County, bringing much-needed financial and emotional relief to more residents,” Allison Sesso, president and CEO of Undue Medical Debt, said in a statement. “This initiative exemplifies how local government can make a transformative impact on families who are least able to pay these burdensome debts.”

    Medical debt is considered the leading cause of bankruptcy in the U.S., affecting roughly four in 10 adults, according to the nonpartisan nonprofit KFF. Pandemic relief funds received by Orange County (roughly $270 million total under the American Rescue Plan Act of 2021) came with restrictions on how the funds could be used, and had to be fully obligated for a particular purpose by Dec. 31, 2024. 

    Medical debt is considered the leading cause of bankruptcy in the U.S., affecting roughly four in 10 adults

    This means the funds are already depleted or are otherwise unavailable to use for other purposes like emergency SNAP funding.

    According to county documents, the bulk of Orange County’s direct allocation from ARPA was obligated for social and community services, the county’s public health response, and “revenue recovery investments” such as technology upgrades. 

    But county commissioners were also persuaded by a coalition of local advocates last summer to dedicate just a small portion of remaining funds to help relieve the burden of medical debt for residents, many of whom were (and still are) struggling to get by after double-digit rent hikes that hit the county after the expiration of COVID-related eviction moratoriums in late 2020.

    “Throughout my 11 years as a social worker in this county, I’ve seen that medical debt has created incredible barriers for people to gain stability,” Adam Hartnett, a licensed clinical social worker with Poverty Solutions Group, told county commissioners last year. “I’ve worked with families who have hundreds of thousands of dollars in medical debt who simply can’t move economically because of this burden.” 

    The campaign for the initiative was led by Central Florida Jobs with Justice, a coalition of local labor, faith and social advocacy groups that has also backed a proposed expansion of Medicaid. Samuel Delgado, an organizer with CFJWJ who pushed for the debt relief, told Orlando Weekly he was “thrilled” to see the program continue to provide “much-needed relief” to his neighbors, especially in the current political climate. 

    “As political attacks on working class people have set back America’s healthcare system even further this year, we are continuing our efforts to organize here in Orange County in pursuit of additional opportunities to address obstacles that stop people from getting the care they need,” Delgado said in a statement. “We hope our community and its leadership will continue to show out like they did for medical debt relief, especially amid the difficulties that lie ahead.”

    The debt relief initiative was made possible thanks to federal funds provided under the Biden administration’s American Rescue Plan Act.

    The medical debt relief plan will be funded by $4.5 million in unspent federal pandemic relief funds.

    Difficulties ahead

    Medical debt could become an even more mainstream reality for U.S. adults if the health insurance tax credits that Democrats and Republicans are currently fighting over expire, as scheduled, by the end of 2025. 

    These enhanced tax credits have helped millions of low- and middle-income Americans over the last four years afford health plans purchased through the Affordable Care Act (ACA) Marketplace at a lower cost. Without them, monthly premiums will more than double, on average.

    Medical debt is already more likely to affect people of color, low-income families and seniors, and people who don’t have any health insurance altogether. But healthcare advocates have warned that if the enhanced tax credits expire, millions will choose to go without health insurance due to the unaffordable cost.

    “If you want to vote an evil bill in to take away healthcare from people, do it by yourselves,” U.S. Congressman Maxwell Frost (D-FL) said at a rally earlier this month, urging Republicans to agree to extend the subsidies.

    The issue has been a primary point of contention in federal budget talks that have left the federal government shut down since Oct. 1. Republicans blame Democrats for the shutdown, arguing that the tax credits issue can be negotiated once the government reopens, while Democrats argue that reaching an agreement on this issue can’t wait.

    “Remember when Donald Trump ran on lowering costs? Well, now he’s running away from lowering costs with this key negotiation,” U.S. Congressman Darren Soto, a Democrat from Kissimmee, shared in a news conference earlier this month.

    Florida Democrats have also been sounding the alarm on a looming pause to federal food assistance that is distributed monthly to nearly three million Floridians through the federal Supplemental Nutrition Assistance Program (SNAP).

    If the government shutdown persists into November, the Florida Department of Children and Families — the state administrator of the program – has already warned that SNAP benefits will be paused until the government reopens and federal funding is restored. More than 40 million U.S. adults and families are served by the program nationwide.

    “For families already struggling under record food and housing costs, the loss of this critical support would be catastrophic,” a letter to Florida Gov. Ron DeSantis, penned by Florida Democratic Senate leaders this week, reads. “Local food banks and pantries have already reported overwhelming demand and depleted supplies. … We are days away from a full-blown hunger emergency that will leave families without food during the holiday season. The state cannot stand by.”

    DeSantis, meanwhile, has rejected Democrats’ call for him to declare a state of emergency, or to tap into the state’s $5 billion “rainy day fund” for emergency food aid.

    “Did those Democrats write a letter to [U.S. Senate Minority leader] Chuck Schumer asking him to stop filibustering the spending?” DeSantis asked at a news conference Wednesday. “Come on.”

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    Nearly 3 million people are expected to lose access to the federal food assistance program

    Florida has the fourth largest SNAP enrollment nationwide with 2.94 million relying on the assistance for food security

    Nearly 3 million Floridians are at risk of going hungry if government shutdown stretches into November



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    McKenna Schueler
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  • Orange County leaders delay vote on medical debt cancellation initiative

    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 during Board of County Commissioners meeting on June 18, 2024.

    After initially green-lighting 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 on Tuesday delayed a vote on final approval of the project.

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

    A county administrator was able to answer some questions. But Undue Medical Debt, the nonprofit that the county would be working with on the project, did not make a representative available at the meeting to answer others.

    This ultimately made some commissioners uncomfortable with moving forward on a vote.

    “We’re doing the right thing here. We’re paying for this debt. How does that actually affect our residents’ credit scores and credit reports?” asked county commissioner Nicole Wilson, who expressed concern that the process would be incompatible with the ways that the debt collection process works. “I want to be able to hear from them [Undue Medical Debt] and see that before we sign off.”

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

    “It’s our understanding that wasn’t an option,” wrote Lempert over email.

    “We’re excited about the opportunity to facilitate medical debt relief for qualifying Orange County residents,” Lampert continued, “And we’ll make ourselves available in the near future to answer any lingering questions from the county board and hopefully finalize the contract.”

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

    The nonprofit organization, based in New York, was founded in 2014 by former debt collectors who wanted to be part of a solution to the devastating problem they saw on the collection side.

    Over the last decade, the nonprofit says it has erased more than $12 billion in debt for over 7 million families. Every one dollar donated erases an average $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 through the American Rescue Plan Act.

    According to county documents, that $4.5 million would be capable of abolishing an estimated $424 million of medical debt for approximately 154,593 eligible Orange County residents.

    As part of the project outline already drawn up by county staff, those who have their medical debt cleared would be notified by the nonprofit that their debt had been cleared (through an investment by the county). According to Undue Medical Debt, residents would also be notified that their negative credit marks associated with the debt would be removed.

    In addition, according to county documents, the nonprofit would also include information on “how to access hospital charity care, no-cost or low-cost medical care, and no-cost financial assistance,” as part of a mitigation strategy to help prevent future debt issues.

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

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

    “I think about the people who have swiped their card 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 she became unemployed and later contracted COVID-19, exacerbating pre-existing medical conditions.

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

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

    The nonprofit’s process of actually buying up and abolishing residents’ medical debt involves directly buying the debt from hospital systems and other healthcare providers.

    Two major local hospital systems — Orlando Health and AdventHealth — have already indicated they’re willing to participate, according to the county.

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

    “Those debts have already been sold,” said Wilson. “People who are getting notices now get them from a third party provider. It’s off the books of Advent Health and Orlando Health.”

    County administrator Warren Lakhan, who provided a presentation to commissioners on the initiative Tuesday, sought to relieve her concerns, sharing that hospital systems often still hold this debt, but Wilson felt she didn’t have enough information from the nonprofit they’d be partnering with to make an informed decision.

    Commissioners Uribe and Mike Scott, who has himself struggled with medical debt in the past, similarly questioned whether this investment would live up to its promise, or just serve as a stopgap solution to help a limited pool of people.

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

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

    While over 90 percent of the U.S. population has some form of health insurance, insurance coverage alone can be insufficient to cover the cost of a major medical procedure, treatment for cancer or chronic illness. The U.S., to date, is the only industrialized country that doesn’t guarantee health care for its citizens through universal healthcare coverage.

    Representatives of Undue Medical Debt have openly admitted that clearing people’s medical debt won’t necessarily prevent future troubles with medical bills, or other affordability issues.

    “What we do doesn’t solve the problem, but it removes some of the burden,” Allison Sesso, the nonprofit’s president and CEO, recently told The Guardian, after a study was released indicating that the impact of clearing medical debt may be limited.

    A medical debt cancellation program in Orange County would be fairly simple for residents, at the very least. There would be no application process necessary to have debt cleared, thereby removing any concern about ensuring those most burdened by debt are made aware of the program.

    By working with hospital systems, Undue Medical Debt would instead be able to identify those who owe debt, clear it, and notify those individuals after.

    Those who qualify would include individuals 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 line) or who have medical debt that equals or exceeds 5 percent of their total household income.

    For reference, 400 percent of the Federal Poverty Line in 2024 is $60,240 for a single-person household, or $103,280 for a household of three.

    A proposed $4.5 million investment would be capable of abolishing an estimated $424 million of medical debt for over 150,000 Orange County residents.

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

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

    Mayor Jerry Demings seemed unenthusiastic about the delay, but was receptive to his fellow board members’ concerns. “It’s not that we don’t support the medical debt relief program. What we want to make certain is that the individuals who are COVID-impacted have a positive outcome with their credit score, and that the debt is indeed relieved.”

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

    There was no clarification from the board on when a final vote might take place. Orange County, which received a total $270.8 million in funds through the American Rescue Plan Act, had about $23 million left to allocate as of February, with a limited amount of time to do so.

    Under spending rules, the county has to have all of their funding financially obligated by the end of 2024, and make sure it’s fully spent by the end of 2026.

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    McKenna Schueler

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  • Orange County poised to use federal pandemic relief funds to cancel medical debt

    Orange County poised to use federal pandemic relief funds to cancel medical debt

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    Orange County Government

    Orange County Mayor Jerry Demings

    Orange County commissioners decided after a lengthy discussion Tuesday to dedicate a portion of unused federal pandemic relief funds to wipe out medical debt for hundreds of thousands of debt-burdened residents.

    The American Rescue Plan Act of 2021, a priority of the Biden administration, allocated $350 billion for state and local governments to provide economic relief for individuals, families and businesses.

    Orange County, which received a total $270.8 million in funds, had about $23 million left to allocate, with a limited amount of time to do so. According to county staff, the county needed to have all of their funding financially obligated by the end of 2024, and spent by the end of 2026.

    Other proposals — dedicating funds for affordable housing, job assistance for the unemployed, and filling a budgetary shortfall for a new fire station — were also approved Tuesday.

    Medical debt, a problem exacerbated by the COVID-19 pandemic, is a leading cause of bankruptcy in the United States, affecting more than two in five U.S. adults.

    Central Florida Jobs With Justice, a nonprofit coalition of local labor unions and social advocacy groups that support the initiative, estimates that a quarter-million residents in Orange County alone — roughly 17% of the county population — are saddled with medical debt, which affects not just low-income households, but middle-income households, too.

    “We know that poverty and financial instability are systemic issues at their core, not individual failings,” said Tara “Glitter” Felten, an organizer with CFJWJ, during the public comment period of the board’s Tuesday meeting.

    Over 90 percent of the U.S. population has some form of health insurance. But health insurance alone can be insufficient to cover the cost of a major medical procedure, treatment for cancer or chronic illness. The United States, to date, is the only industrialized country that doesn’t guarantee health care for its citizens through universal healthcare coverage.

    For some, it can take just one accident, one unexpected health emergency for someone to be saddled with thousands of dollars in debt.

    “Just because someone has insurance doesn’t necessarily mean that they will not incur medical debt [due] to out-of-pocket-cost, deductibles and copays,” said Warren Lakhan, a family services administrator for Orange County, in a presentation to the board.

    The initial request from CFWJW, based on debt estimates in Orange County, was an $8.7 million allocation for the project.

    With that $8.7 million investment, using leftover funds from the American Rescue Plan Act, the county could have canceled an estimated $827 million in medical debt for 300,000 residents.

    Eventually, county commissioners settled on a $4.5 million figure — aiming to balance the progressive initiative with other spending priorities.

    Orange County would be the first county in Florida to launch such an initiative, according to county staff — but it would join a growing wave of other local governments across the country doing the same. It also signifies a critical way in which Orange County can take action to address debt burdens negatively affecting working families without having to wait for action from the state.

    Eimar Roy, a local resident and primary caregiver of two children, told Orange County leaders that she never thought she would find herself with medical debt. Then the pandemic hit. She became unemployed, and then, became sick with COVID-19. “I am one of the unfortunate people that had pre-existing conditions that … basically caused permanent heart and other damage,” she shared. “This is not something that I was responsible for.”

    Dr. Jennifer Ferreira, who works as a clinical pharmacist in a local emergency room, told commissioners that in her work she sees the damage medical debt can cause, like patients with chronic illnesses who aren’t taking their prescribed medication because they can’t afford it, or because they’re already in debt, or are uninsured.

    She shared the story of one woman — an older woman in her 60s who’d recently lost her health insurance, and who was struggling to find affordable housing — as an example.

    “This patient wasn’t able to take any of her high cholesterol, blood pressure or diabetic medications, resulting in her body going into quite literal crisis,” said Ferreira. “I really urge you guys to do this so I don’t have to see my patients struggling to access the bare necessities they deserve.”

    “I really urge you guys to do this so I don’t have to see my patients struggling to access the bare necessities they deserve.”

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    According to KFF, about 14 million people (or 6 percent of adults) in the U.S. owe more than $1,000 in medical debt. About 3 million people (1 percent of adults) owe medical debt of more than $10,000.

    The idea of using ARPA funds to cancel medical debt isn’t novel. The Associated Press reported last year that an increasing number of municipal, county and state governments — including New Orleans; Cook County, Illinois; and Toledo, Ohio — had opted to leverage portions of their federal pandemic relief funds to eliminate residents’ medical debt.

    The wave of local governments opting in, according to NPR, is only growing. New York City recently hopped on board last month, and Wayne County, Michigan is also considering a similar proposal.

    The first was Cook County, Illinois — home to Chicago — which pledged $12 million in ARPA funds to the cause in 2022 through a partnership with the nonprofit RIP Medical Debt. As of last October, the county had abolished over $280 million in medical debt, benefiting 158,541 residents.

    Orange County has also been in talks with RIP Medical Debt, a New York-based nonprofit, and local governments they’ve worked with about how this could work in practice.

    Lakhan, the family services administrator, said that because of how the process works, there’s no need to apply for medical debt relief through the program. Instead, people who have their debt cleared would receive a letter in the mail notifying them that their debt had been erased.

    RIP Medical Debt, founded in 2014, is able to identify unpaid medical bills owed by people making up to four times the federal poverty level or whose medical bills total more than 5 percent of their annual household income. They work with local governments, individuals, organizations — anyone who wants to donate to the cause.

    Through agreements with hospitals and health care providers, RIP Medical Debt buys debt in bundles at a fraction of the cost. For every $1 appropriated, about $100 in medical debt can be canceled. “So there is a lot of leverage in terms of the benefit provided,” said Lakhan.

    Over the past decade, the nonprofit has wiped out more than $10 billion in debt, helping more than 7.1 million families, according to their website.

    Central Florida Jobs With Justice initially requested an $8.7 million investment for the initiative. County staff conducted interviews with other local governments who had worked with the nonprofit, as well as the staff of RIP Medical Debt themselves to learn more about not just how the project works, but how well it’s worked.

    Demings sat in for some of these discussions himself. Medical bills can trap a person in a “doom loop” between their insurance and their healthcare provider. Debt itself can hurt a person’s credit, and can pressure a person who is uninsured or who has fewer financial means to delay seeking additional medical care. It can also affect a family’s ability to cover other basic living expenses.

    The problem, according to county staff, was that they’d already earmarked funds for other initiatives that could be funded using ARPA dollars. Those other proposals were: $5 million for affordable housing, $5 million to extend a contract with Career Source for job assistance assistance services, $7.7 million for a new fire station (necessary due to a budget shortfall, apparently), $1 million for the Second Harvest food bank, and $4.3 million for homelessness and mental health services.

    That is, there was no money left for the $8.7 million medical debt relief plan. County staff say this is because Central Florida Jobs With Justice — the nonprofit leading the push — came to them with the idea after they’d already put together their allocation wish list.

    But some commissioners questioned how the funds were divvied up. No one really wanted to touch most of what was allocated — it all seemed pretty tight, noncontroversial. Cut funds for helping the homeless or funds to address food insecurity? That’s Bad Optics 101.

    But Commissioner Emily Bonilla did point to the fact that Career Source — a workforce development agency that’d already received $15.3 million in ARPA funds — still had 40% of funds from their previous allocation. Both Bonilla and Commissioner Mayra Uribe also questioned whether Career Source was actually making good use of the money they’d been given already. Both had had negative experiences trying to work with them in the past.

    “They have the money to do what we had asked them to do,” said Bonilla, exasperated. “They want more money in order to do more of that, which isn’t working. It just doesn’t make any logical sense.”

    Uribe, who had to duck out of the meeting early for another commitment, added that unemployment is low. The real problem, she said, is the low wages that are offered up by the employers desperately seeking labor in the area.

    “We don’t have a job issue,” said Uribe. “We have a wage issue.”

    Out of the 1,023 total job placements Career Source had achieved through its allocation of ARPA funds already, just 856 paid over $15 an hour. The average income after receiving help was just $19.55 an hour.

    Rent prices in Orange County alone skyrocketed in 2021 and 2022, reaching double-digit percentage increases. While U.S. inflation has slowed, food prices are up, too. So is gas, and childcare, another major expense for working families in Orange County.

    Still, other commissioners felt uneasy about slashing Career Source’s allocation entirely. “I’m just not 100% comfortable making a drastic cut to something that I know I’ve benefited from personally,” said Commissioner Mike Scott, who shared that he had once been unemployed for several months himself. The agency’s assistance has also helped young people out of work, he added.

    Scott — the board’s newest addition, elected in 20222 — said he was “certainly in favor” of the idea of pursuing a medical debt relief program. “I’ve had a number of medical debt [sic] in a couple of years that did affect my credit quite severely.”

    But there was disagreement on numbers. Bonilla wanted to slash Career Source out entirely to help fund the medical debt cancellation. Scott fought for a $2.5 million compromise — a 50% cut — and had some concern about the initial $8.7 million figure.

    Demings, who fought surprisingly hard to ensure the debt initiative wasn’t axed, also asked county staff to see if the county could find $2 million for the fire station through other means, in order to free up some of that $7.7 million pot, too.

    Altogether, the commission was able to agree on a $4.5 million figure for medical debt cancellation through both cuts. This means less debt would be canceled, likely aiding fewer people. The allocation is still subject to final approval, and should be on the board’s consent agenda for a final vote sometime this spring, a county spokesperson confirmed.

    “This budget has to balance at the end of the day,” Demings conceded.

    Central Florida Jobs With Justice celebrated the achievement on Instagram, with the caveat that they plan on organizing for the full $8.7 million ahead of the final vote.

    “Today is a testament to the organizing efforts and unwavering persistence of community leaders who amplified their stories and fearlessly championed those burdened by medical debt,” the nonprofit posted on social media. “It not only underscores our collective power, but the notion that behind every policy charge are working people committed to uplifting their communities.”

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