Thousands of Central Florida residents suffering from medical debt have been given the “string gifts,” according to a national nonprofit that partnered with the county to allow a total of about $472.5 million.
Over the past two weeks, more than 310,000 people have received notifications that their medical obligations have been cancelled, officials said.
“For our family, the majority of commissioners in Orange County, Florida, represent hope (and) hope that they are truly listening to those most affected by poverty,” 57-year-old Amia Roy said in a textbook for the Orlando Sentinel.
Her cancelled debt was modest, $200, but she said it was highly valued and sufficient to cover monthly utility bills.
Roy was one of a group of community advocates who have appealed to commissioners several times over the past 18 months by using the remaining funds from the 2021 American Rescue Plan Act.
The federal relief package, also known as the ARPA, was intended to help individuals, families and businesses deal with economic fallout from the Covid-19 pandemic. Orange County received $270.7 million in ARPA funds.
The committee approved the $4.5 million contract last August, previously known as the RIP Medical Debt. It is a nonprofit that buys and wipes out eligible medical debt in bulk at a portion of its face value.
The letter to the recipient was intended to “share the good news” of debt cancellation.
“No one is obligated to pay this debt in the future.” “Income tax is unpaid because this debt was cancelled due to excessive medical obligations using funds provided by the Orange County Government FL.”
This letter reminds recipients who may still be owing other medical expenses.
However, nonprofit websites warn visitors about phishing scams or cybercriminals. Cybercriminals use similar web addresses to trick recipients and donors into providing conditional personal and financial information for fraudulent purposes.
The county also set up the web page ocfl.net/medicaldebt to provide answers to frequently asked questions.
Orange County has joined the growing list of locations with similar debt waiver programs, including Arizona. Cleveland, Ohio; Los Angeles County, California. New York City; New Orleans; Washington DC
Excessive medical debt did not accept individual applications for relief, but identified eligible debtors through partnerships with hospitals, healthcare providers and debt collection agencies. The average debt elimination was $1,728.
Many recipients were surprised to learn about debt cancellation. Some thought the letter was a scam.
A post about Reddit, an online forum, asked fellow users of social media platforms if anyone else received a letter about their medical debt. She said a notice from a debt collector chasing payments on old bills for an ER visit for her two sons, “But actually, the letter from Orange County said she paid over $2,500 in debt!!!”
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Commissioner Mera Uribe, who voted for the debt agreement, said the agreement was affected.
“We are delighted that thousands of residents have received some relief amidst our economic uncertainty,” she said.
The guidelines required beneficiaries to live in households with medical debts greater than 5% of their annual income or with incomes less than 400% of federal poverty levels. For a single household, three households, it is under $62,600 and under $106,600.
“This program is the latest county-wide effort to improve the quality of life for our residents,” Orange County Mayor Jerry L. Demings said. “This collaboration with excessive medical debt allows the Board to efficiently maximize the impact of public funds and helps as many individuals as possible stay financially stable.”
The cancelled debt was usually paid to the doctor’s office, hospital, or collection agency.
Matthew Grokolsuke, 22, sued the county to help relieve his medical debt, but he was not the lucky few thousands whose debts were cancelled. “Unfortunately, no,” he said. “But some people who definitely need it have got it.”
A report by KFF of the Healthcare Research Group, known as the Kaiser Family Foundation, found that 90% of Americans have some type of health insurance, but medical debt remains a persistent issue.
Two out of five Americans have medical debt, with nearly half of whom borrowing at least $2,500, according to the National Economic Research Bureau. Unpaid medical debts, particularly when sent for collection, historically harm the debtor’s credit score, making it difficult and costly to qualify for a mortgage, car loan or personal loan.
