January 24, 2024
New York City aims to alleviate the burden of medical debt for up to 500,000 residents, totaling over $2 billion, as part of a comprehensive initiative.
Fortune reports that New York City intends to alleviate the burden of medical debt for up to 500,000 residents, totaling over $2 billion, as part of a comprehensive initiative announced by Mayor Eric Adams on Jan 22.
Partnering with the nonprofit organization RIP Medical Debt, the city plans to address a significant contributor to personal bankruptcy by purchasing medical debt in bulk from hospitals and debt collectors at a fraction of its value. RIP Medical Debt specializes in targeting the debt of individuals facing financial hardships or with low incomes, and subsequently forgives those amounts.
Under this unprecedented program, New York City commits to spending $18 million over the next three years to provide relief to those who are struggling with the financial fallout of medical bills. Mayor Adams emphasizing the devastating impact of medical debt on middle- and working-class New Yorkers, citing the challenging choices these families often face between paying medical bills and meeting basic life essentials.
Citing medical debt as the leading cause of bankruptcy in the United States, Adams described the relief initiative as the most extensive municipal effort of its kind in the country. He said that the $18 million investment over three years is a worthwhile commitment for the well-being of its residents.
Adams expressed the gravity of the situation, saying, “If you are able to … save $2 billion in debt, that $2 billion trickles down to those households, who are not going to fall into our safety net. They’re not going to fall into our homeless system.”
RIP Medical Debt’s President and CEO Allison Sesso confirmed that the relief program would not involve a traditional application process. Instead, recipients will be notified that their debt has been acquired by a third party and subsequently eradicated.
While the initiative is unprecedented in scale, RIP Medical Debt has collaborated with other municipalities to address the pervasive issue of medical debt. New York City’s commitment to this program reflects a comprehensive approach to supporting vulnerable communities and preventing the long-term economic impact of medical debt.
As the city takes this significant step toward financial relief, it signals a potential model for other municipalities across the nation grappling with the pervasive challenges posed by medical debt.
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