Orange County approves plan to wipe out more than $400 million in residents’ medical debt

Orange County commissioners voted Tuesday to approve a plan that will eliminate an estimated $424 million in medical debt for more than 150,000 individuals and families in Orange County over the next two years.

The plan, approved in a 5–2 vote, will involve leveraging $4.5 million in unspent federal American Rescue Plan Act funds the county has to relieve the debt. Mayor Jerry Demings and county commissioner Christine Moore cast the two dissenting votes.

These federal funds were provided to the county by the federal government in 2021 to help address the financial impact of the COVID-19 pandemic on local communities. All of the county’s ARPA funds must be obligated by the end of this year, and fully spent by the end of 2026. The county received $271 million in ARPA funds altogether, and nearly all of it is already obligated or spent.

Local advocates in support of the medical debt relief plan underscored the importance of the initiative during Tuesday’s board of county commissioners meeting.

“Throughout my 11 years as a social worker in this county, I've seen that medical debt has created incredible barriers for people to gain stability,” said Adam Hartnett, a licensed social worker who works with the local nonprofit Poverty Solutions Group. “I've worked with families who have hundreds of thousands of dollars in medical debt, who simply can't move economically because of this burden.”

The plan is for the county to work in partnership with Undue Medical Debt , a New York-based nonprofit that is currently working with 20 other state and local governments — from New Orleans to the states of New Jersey and Arizona — on similar initiatives.

Since its formation in 2014, the nonprofit (formerly known as RIP Medical Debt) has abolished more than $13 billion in medical debt for more than 8 million individuals and families. They do this by collaborating with healthcare providers and buying up debt owed by patients for pennies on the dollar.

“We know that people do not go to the hospital to get the care that they need because they are in debt,” Sesso told Orange County commissioners during an in-person presentation Tuesday.

Hospitals, she explained, are often amenable to working with her nonprofit because they view their job in the community as supporting the health and well-being of residents. This is something that Sesso said is unfortunately “undermined” by the fact that many people “are sitting on medical debt, and aren't going and getting the care that they need.”

Orlando Health and Advent Health — two of the area’s largest hospital systems — have already agreed to participate in the program, according to Sesso. Medical debt accumulated through healthcare providers outside of those systems could also be eliminated, if there are funds left over, but is not guaranteed to be eligible for relief under this plan, Sesso confirmed.

Nationwide, about 14 million people in the U.S. owe over $1,000 in medical debt, according to a KFF analysis, and about 3 million people owe medical debt of more than $10,000. In fact, medical debt is the leading cause of personal bankruptcy in the U.S., and disproportionately impacts Black and Hispanic households, low-income families, and uninsured adults.

Polling has found that adults often delay or avoid seeking care for health concerns due to worries about the potential cost. Medical debt can also negatively affect credit scores, impacting the ability to secure loans, housing and credit cards. The Biden-Harris administration recently uplifted efforts by states and local municipalities across the country to use public funds to abolish medical debt for their communities.

Local Bishop David Maldonado said the local initiative will ultimately go beyond the issue of medical debt itself “to build a more inclusive, responsive governance system that really reflects the aspiration and challenges of all residents.”

“It paves a way for more equitable results for everyone in our community,” Maldonado added.

Tara “Glitter” Felton, an organizer with Central Florida Jobs With Justice, said it’s “immoral” for working people and families to have to push through illness to avoid accumulating debt. “It is immoral to allow families to lose their homes because they had debt from going to the hospital.”

Orange County leaders first gave a greenlight to the proposed plan earlier this year, which had been brought forward to the board for consideration by community advocates with Central Florida Jobs With Justice, a coalition of local unions and social advocacy and welfare organizations.

Initially, the group advocated for the use of $8.7 million in ARPA funds to clear medical debt, but county commissioners opted to reduce that figure to $4.5 million, in order to divvy up the rest of the county’s unspent funds for initiatives such as local job and career development resources, tackling food insecurity, affordable housing and homeless initiatives.

The county postponed a decision on the medical debt relief proposal in June, with several commissioners sharing that they felt uncomfortable moving forward with the $4.5 million allocation with several of their questions left unanswered.

Sesso, CEO of Undue Medical Debt, traveled to Orange County personally to share a presentation for the board on how the process of medical debt relief through her nonprofit works and to answer commissioners’ questions.

Through a collaborative process with Orlando Health and Advent Health, she explained that Undue Medical Debt will identify local residents in Orange County with outstanding medical bills and buy up their debt, thereby eliminating it. Those who are eligible for medical debt relief include Orange County residents who either have an income below 400% of the federal property level (roughly $103,000 for a family of three) or who have medical debt that equals or exceeds 5 percent of their annual household income.

As Sesso explained Tuesday, there is no application process for the program, meaning if you qualify, and the nonprofit can buy up your debt, you will automatically benefit.

“A lot of social interventions require an application process, and that's actually a barrier to getting the benefit,” Sesso explained.

Instead, the nonprofit will “pre-qualify” residents, as she described it, by doing an analysis of unpaid medical bills. After the debt has been abolished, the nonprofit will send residents notification letters to let them know that their debt has been relieved. The letter will give the county government credit for the debt relief, and provide other information for residents on available financial assistance programs, local no-cost or low-cost care options, and other frequently asked questions about the medical debt relief.

According to Sesso, people who get these letters often report “surprise and sometimes disbelief, but then followed, usually, by tears of joy and relief.” If the debt was reported to credit agencies, those marks will also be removed as part of this process, which will increase credit scores. “It's pretty simple,” said Sesso, “And we do a follow-up to ensure that it actually happened.”

Although no formal timeline is available for locals at this time, Sesso estimated that residents could expect to begin receiving notification letters of their medical debt relief within the next six to 12 months.

The initiative will run through Sept. 30, 2026, according to county documents, and will be monitored by Orange County’s Community and Family Services Department.

Mayor Demings, a key supporter of the initiative from the start, nonetheless voted down the plan on Tuesday, citing the need to allocate more funds toward the county’s affordable housing and homelessness crisis. “From a financial perspective, we recently heard from some of our constituents in East Orange County as well as West Orange County, indicating that there's a growing number of unsheltered individuals and encampments in both areas,” said Demings. “Given the change in Florida law, I think that when we look at our budget, there's a lot of pressures there,” he added.

A new state law approved by Gov. Ron DeSantis, effective October 1, will make it illegal for homeless people to sleep on public property. Effective Jan. 1, 2025, the law will allow local businesses to sue city and county governments that fail to enforce the ban.

Commissioner Christine Moore, the other dissenting vote, agreed with the need to dedicate more funds to housing solutions. Commissioner Mayra Uribe, however, pointed to the fact that, first, they are working with a time crunch to obligate their remaining ARPA funds, and second, the board already dedicated more than $10 million in ARPA funds specifically to address housing and homelessness issues already.

“We're getting more bang for our buck with this investment into our community,” Uribe argued. “Four-point-five million is not going to make or break homelessness,” she continued, while the medical debt relief plan “can actually help residents right now” who could eventually become homeless or lose their homes due to medical debt. People, she added, who have bad credit, who can't get a credit card, or who can't buy a car because of unpaid medical bills.

Sesso, the CEO of Undue Medical Debt, grimly acknowledged that she honestly doesn’t believe her nonprofit should have to exist. But she pointed out that, in addition to abolishing debt for an estimated 154,593 residents, the plan will broadly also be an educational opportunity.

“By doing this, you're lifting the bar on the issue of medical debt, which creates opportunities for you to talk about this issue and educate people, and think about other solutions that can address the problem,” she shared.

Demings said he also worried about creating “false hope” for residents who aren’t helped by the initiative. Due to privacy laws, county staff who receive inquiries from locals won’t be able to definitively tell residents whether their debt will be eligible for relief. “It’s a big unknown,” he said.

Commissioner Nicole Wilson — who expressed reservations about the proposal in June — ultimately voiced support for the plan Tuesday, satisfied with Sesso’s answers to her questions about the process. “I will tell you philosophically, we're all on the same page, right? We're trying to make sure that we're helping the most vulnerable of our residents.”

Wilson added that they’ll have to find ways to address issues of homelessness and lack of capacity in local homeless shelters regardless. “We’re trying to beat the clock on the state law with some of these shelter issues,” she acknowledged. “We know we’re under capacity for shelter — we're gonna have to address that no matter what.”