Michigan Takes Steps to Alleviate Medical Debt for Thousands
In a significant move to relieve financial burdens, the State of Michigan has announced the erasure of medical debt for over 200,000 of its residents. This initiative was made possible through a partnership with the nonprofit organization Undue Medical Debt, which has facilitated the purchase and subsequent forgiveness of medical debts totaling over $144 million.
Allison Sesso, CEO of Undue Medical Debt, explained that the organization employs strategies similar to those used by for-profit debt buyers. “We don’t follow up and say pay us something back, we’ll come into a payment plan. We say your debt is free and clear and you no longer owe it. And so that’s how our model works. People say, ‘Is this magic?’ No, it’s just math. There is a reality that medical debt can be bought for pennies on the dollar. One dollar relieves a hundred dollars of medical debt on average,” Sesso elaborated during a press conference in Detroit.
Residents are being advised to watch for letters from Undue, which will notify them if their medical debts have been forgiven. These notifications are expected to be distributed by the end of the month, according to government officials.
Governor Gretchen Whitmer highlighted that nearly 210,000 individuals could benefit from this debt relief, and she signaled a potential for future expansions. “I think we all have our antennae up because we see those scams all the time. This is real and this is a non-profit that’s coming in and partnering with counties in the state of Michigan. Could we bring other philanthropy in and perhaps draw down more resources? Yes and that’s something that we’ll continue to pursue,” Governor Whitmer remarked to reporters.
The current debt forgiveness initiative has been funded through the fiscal year 2024 budget. However, the budget for the upcoming fiscal year remains incomplete, as state lawmakers continue their deliberations. The Democratic-controlled state Senate favors an all-inclusive budget approach, while the Republican-led House of Representatives advocates for separate funding bills for schools and roads.
House Speaker has indicated a preference to see the impacts of the federal “Big Beautiful Bill,” which recently passed and heavily influences state funding, before finalizing the state budget. Governor Whitmer emphasized the importance of road funding in conjunction with the budget, stating, “We have supplementals, negative and positive, that are always tools for budget adjustments. That being said, here we are in the middle of July, toward the end of July now, and we still have work to do. And I want to be clear, the budget is not done until the roads are done as well.”
During the same press conference, Governor Whitmer addressed an ongoing investigation by the state attorney general’s office into a Michigan Economic Development Corporation grant. Whitmer supported the MEDC’s decision to rescind the grant, asserting, “Any individual grantee who gets money and is not lawful with it or is inappropriate with those dollars should expect to be held accountable.”
Additionally, the governor responded to inquiries about a shelved multi-billion-dollar semiconductor project initially slated for the Flint area. State officials acknowledged the project’s cancellation, attributing it to the company’s decision against expanding in the U.S. amid economic uncertainty. Whitmer pointed to tariff policy uncertainties as a contributing factor, but remained optimistic about future investments, stating, “I called the President yesterday. I spoke with him to share with him what this development was and how it was very disappointing. He said tell the press we are going to work together and get an even better deal for the state of Michigan and so that’s what I’m telling you.”
Efforts continue by state and local leaders to attract new investments to the Genesee County’s Advanced Manufacturing District, with significant resources already allocated to its development.
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