If a non-profit is buying the debt and forgiving it, where do the State and Gretchen Whitmer come in? Is the State of Michigan funding the non-profit? How much do the charity’s officers and employees make? How does this help the medical service providers, left with “pennies on the dollar”? Or discourage others from running up bad debt?
If a non-profit is buying the debt and forgiving it, where do the State and Gretchen Whitmer come in? Is the State of Michigan funding the non-profit? How much do the charity’s officers and employees make? How does this help the medical service providers, left with “pennies on the dollar”? Or discourage others from running up bad debt?From digging through quite a few news articles, one or two mention that the State provided $4.5MM, and donations are "matching funds", but doesn't say if those are matching 1:1, or 100:1, or 1:100. So I'd guess the State was a huge majority, considering the nonprofit didn't already spend several millions recently on this, implying they didn't have the $$ until the State gave it to them. The State funding is what pushed this round of purchasing.
Per
Charity Navigator, the CEO makes $300M, and the program hits about 81% to it's actual charity. So pretty decent compared to most.
Medical service people 'like' it, because most of this debt was written off anyway. They expect to recoup $0/$100,000, so getting $2-5M instead is better than nothing. Because most people owe way too much compared to income/assets, and barely work or go all-cash anyway. They already know they aren't paying it back, so why bother trying at all? Getting the debt paid for them is a "relief", but it really won't actually help the large majority of recipients.
I doubt this encourages or discourages people from running up more debt. Medical expenses are innediately necessary (ignoring the service/price inflation; when you break your arm, you HAVE to go to the doc), so people aren't going to skip the doc for most stuff. They'll go to the ER and just skip the bill and add more debt to their bill they don't plan to pay. There may be a few people who die due to being scared to go in, but those really aren't very common at all.