The Bad Logic of Debt Forgiveness
Michigan is forgiving small amounts of medical debt. Where is self-responsibility?
6/25/20262 min read
Michigan took another step in its effort to eliminate medical debt for thousands of its residents. Was it major medical debt an average person couldn’t possibly pay off? No! It was extremely minimal debt.
The state is wiping out $74 million in medical debt for 71,871 individuals - or $1,034 per person, about the same cost as an Apple iPhone 17 Pro. It’s 30% less than the average mortgage payment in Michigan, or a mere $3 per day over the course of a year. Why are such small amounts of debt being forgiven?
It get worse. Officials say more than $200 million in medical debt has been forgiven for roughly 280,000 Michiganders since the program launched last year. That’s $714 per person, less than four days of pay at Michigan’s 2024 median wage of $23.22.
About 1 in 11 adults in Michigan, or about 690,000 people, report having at least $250 in medical debt, according to University of Michigan. Even at the state’s minimum wage of $13.73, that’s barely over two days of work. Again, why are such small amounts of debt being forgiven?
I want to know who these people are. Are they disabled people for whom forgiveness would be understandable, even if one does disagree with taxes being used for assistance? Are they people with exterior causes of medical issues? Or are they part of the “bad health choices” crowd responsible for half of all medical incidents which drive up overall costs? It matters. I’m willing to help innocent people on my own charitable terms.
Gov. Gretchen Whitmer, naturally, tries to put the blame on President Trump. She said the latest development “ensures fewer Michigan families must choose between putting food on the table or paying their medical bills, at a time when so many already are struggling with rising costs on the essentials driven by tariffs, cuts to Medicaid, and the Iran War.” Considering most Americans are overweight…
The state is working with Undue Medical Debt to administer the relief. Daniel Lempert, Undue’s vice-president of communication and marketing, says, “We basically approach hospitals, physicians groups, ambulance companies, anyone who owns medical debt that’s unpaid, and we buy it in bulk for pennies or less on the dollar.”
That’s a problem: Anyone with a modicum of economic intelligence realizes that such forgiveness means higher prices for everyone else in order to cover such forgiveness. Such increases mean even more people become potentially subject to medical debt. It develops into an endless cycle that healthy people should never have to subsidize with tax dollars.
Citizens Research Council of Michigan, health policy research associate, Karley Abramson, says people already lose access to health insurance due to rising costs. She makes my point precisely, but fails to acknowledge how the cycle began. She, too, blames government policy rather than individual responsibility.
State lawmakers are proposing a package of bills including legislation that would force the state to create a debt relief fund, which would further increase the cycle of debt. No! When minor debts are forgiven, it only encourages more inexcusable behavior leading to major debt.
Source used: Associated Press
