Mayor Eric Adams announced that the city intends to wipe out more than $2 billion in medical debt for up to 500,000 residents, tackling a top cause of personal bankruptcy.
Residents May Get Medical Bills Wiped Out By Mayor
Half a million New York City residents could see their medical bills forgiven. “A burden that is impacting not only a large number of New Yorkers but Americans medical debt is real and you do not make a choice,” said New York City Mayor Eric Adams.
The program is aimed at New Yorkers whose unpaid medical bills are at least 5% of their annual household income or those in households with an income under four times the federal poverty line, which is $31,200 for a family of four.
The city is working with RIP Medical Debt, a nonprofit that buys medical debt in bulk from hospitals and debt collectors for pennies on the dollar. The group targets the debt of people with low incomes or financial hardships and then forgives the amounts. Under the program, the city will spend $18 million over three years, reports the AP.
“Getting health care shouldn’t be a burden that weighs on New Yorkers and their families,” said Mayor Adams. “Since day one, our administration has been driven by the clear mission of supporting working-class New Yorkers and today’s investment that will provide $2 billion in medical debt relief is another major step in delivering on that vision. Up to half a million New Yorkers will see their medical debt wiped thanks to this life changing program – the largest municipal initiative of its kind in the country. No one chooses to go into medical debt – if you’re sick or injured, you need to seek care. But no New Yorker should have to choose between paying rent or for other essentials and paying off their medical debt, which is why we are proud to bring this relief to families across the five boroughs, as we continue to fight on behalf of working-class New Yorkers.”
The mayor said medical debt is the No. 1 cause of bankruptcy in the United States, burdening low-income households and people with inadequate insurance. He called the debt relief program the largest municipal initiative of its kind in the country, though RIP Medical Debt has worked with other municipalities.
RIP Medical Debt president and CEO Allison Sesso said there will be no application process for the program. Relief recipients will be notified that their debt has been bought by a third party and erased.
“No one chooses to go into medical debt — if you’re sick or injured, you need to seek care. But no New Yorker should have to choose between paying rent or for other essentials and paying off their medical debt,” Adams said in a statement.
Though New York City is facing financial strains, Adams said the $18 million commitment over three years is a great investment for the city.