New York City Mayor Eric Adams has unveiled a pioneering plan to tackle the issue of medical debt faced by hundreds of thousands of New Yorkers. The city will allocate $18 million in taxpayer funds over the next three years to pay off the medical debt of up to 500,000 residents, in what is being hailed as the largest municipal initiative of its kind in the country.
Medical debt is a pressing issue in the United States, with nearly 1 in 10 adults owing medical debt, according to the Kaiser Family Foundation. The total amount of medical debt owed nationwide is estimated to be as high as $195 billion. This burden often leads to financial hardship and even bankruptcy for those without health insurance.
New York City’s innovative program will partner with RIP Medical Debt, a local nonprofit organization, to acquire debt portfolios and retiree debt from healthcare providers and hospitals. By purchasing the debt at a discounted rate, the city aims to erase the accumulated medical debt and provide much-needed relief to the affected individuals and families.
Mayor Adams emphasized that no one should have to choose between paying rent or essential expenses and paying off medical debt. The program aims to alleviate the financial burden on working-class New Yorkers and improve their quality of life.
RIP Medical Debt, founded in 2014, is known for its work in buying debt from healthcare providers and using data analytics to identify the most vulnerable debtors. The organization focuses on households earning less than four times the federal poverty level or those whose debts represent 5% or more of their annual income. Once the debt is purchased, individuals receive letters announcing the erasure of their debt, without any tax or penalty implications.
While RIP Medical Debt has collaborated with local governments in the past, the partnership with New York City marks a significant milestone in its efforts. The organization’s president and CEO, Allison Sesso, commended the initiative, highlighting that medical debt not only creates financial burdens but also affects individuals’ mental health. By making future care more accessible, this initiative aligns well with the broader goal of promoting community benefit and health equity.
To supplement the city’s investment, RIP Medical Debt and the Mayor’s Fund to Advance New York City are actively seeking private donations to raise additional funding over the next three years. This collaborative approach ensures the sustainability and success of the program, allowing more New Yorkers to benefit from medical debt relief.
The announcement of this groundbreaking initiative comes at a time when the Biden administration has also taken steps to address medical debt. The administration recently announced a rule to remove medical bills from credit reports, recognizing the need to alleviate the financial burden faced by millions of Americans.
In conclusion, New York City’s commitment to eradicating medical debt through this comprehensive initiative is a significant step towards improving the lives of its residents. By partnering with RIP Medical Debt and seeking private donations, the city aims to provide much-needed relief to those burdened by medical expenses. This program sets a precedent for other cities and states to follow in addressing the pressing issue of medical debt in the United States.
