LANSING, Mich. — Michigan officials recently celebrated the erasure of more than $144 million in medical debt for residents, but a portion of that debt appears to belong to people who are no longer living.
A letter sent to one Michigan address this month shows a debt cancellation notice for a patient who died in early 2021. The letter, from the nonprofit Undue Medical Debt, confirms that $3,469.91 in medical bills from Henry Ford Macomb Hospital had been abolished.
The document is co-signed by Michigan Gov. Gretchen Whitmer and Undue Medical Debt President Allison Sesso, and says the forgiveness was made possible “by the State of Michigan and Undue Medical Debt.”
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The inclusion of deceased individuals in the debt relief effort isn’t intentional, according to Daniel Lempert, Vice President of Communications and Marketing for Undue Medical Debt.
“Our Information Systems team does a scrub to remove accounts belonging to anyone who is deceased or has gone through bankruptcy,” Lempert said. “We source this information from FinThrive. That said, information on deceased individuals is not always available in a timely fashion or there’s a lag time in it being available in the public record. State laws can also muddy the waters.”
He added, “The nonprofit does its due diligence in scrubbing out these medical debts, but there’s a margin of error.”
According to estate law experts in Michigan, hospitals and collection agencies generally file claims against a decedent’s estate if one exists. If there are no assets or if the estate is insolvent, the debt is usually written off as uncollectible. Collection notices are not typically sent to surviving spouses or executors, unless they personally guaranteed the debt.
“A patient might die in the hospital, but if the billing system doesn’t catch it, statements can still go out in their name,” one probate attorney said. “It’s an error, not malicious.”
Michigan’s recent announcement of the $144 million debt relief initiative involves funding from the state and from counties like Oakland, Wayne, and Kalamazoo, which are using federal American Rescue Plan Act (ARPA) dollars. Undue Medical Debt says only a fraction of the $4.5 million in funding has been spent so far — $764,000 was used to eliminate more than $125 million of that debt.
Despite questions about accuracy, the recipients of the debt forgiveness aren’t being asked to repay anything — and the forgiveness carries no tax consequences.
"You no longer have any obligation to pay these specific accounts," the letter states. "You can show this letter as proof if needed."
Still, the inclusion of accounts tied to deceased individuals raises concerns about oversight and transparency in how debt portfolios are screened before being purchased with taxpayer funds.
For more on Undue Medical Debt’s Michigan program: https://unduemedicaldebt.org/faq/announcement
