Flint approves plan to wipe out $32M in medical debt for some residents

FLINT, Mich. — The City of Flint is working with a national nonprofit to erase $32 million in medical debt for more than 10,000 residents.

City council approved the allocation of $50,000 in American Rescue Plan Act (ARPA) funds to partner with Undue Medical Debt, an organization that buys and abolishes medical debt.

According to its website, the organization purchases millions of dollars in debt from sources such as hospitals, physician groups, collection agencies and debt buyers for a fraction of its face value.

“Medical debt is one of the leading causes of bankruptcy in the United States, impacting families and individuals across all demographics,” Mayor Sheldon Neeley said. “By teaming up with Undue Medical Debt, Flint is taking a stand for its residents, ensuring that financial hardships caused by medical bills do not continue to cripple our community. This is about restoring dignity and financial stability to our people.”

The nonprofit focuses on eliminating medical debt for households earning less than 400% of the federal poverty level or with medical bills totaling at least 5% of their income. The debt must also be at least one year old and classified as uncollectible.

“This decision reflects a commitment to lifting the financial burdens that have weighed down our community for far too long,” Pastor Monica Villarreal said. “Medical debt is a significant burden on our families often leading to bankrupcy, credit damage [and] delays in seeking essential medical care.”

Wayne and Oakland counties have also seen success with this partnership, erasing millions in medical debt for thousands of residents.