New York City Mayor Eric Adams has made a bold commitment to alleviate the medical debt burden for numerous city residents. Announcing a partnership with the nonprofit organization RIP Medical Debt, Adams revealed plans to eliminate over $2 billion in medical debt for potentially 500,000 New Yorkers. This ambitious initiative, costing the city $18 million over three years, targets medical debts that have significantly impacted middle- and working-class families in the city.
RIP Medical Debt is known for its ability to buy debts in bulk from hospitals and debt collectors at reduced rates, focusing on those who are most financially vulnerable. The criteria for debt relief include individuals with medical bills amounting to at least 5% of their annual income or those living with an income four times below the federal poverty line. For a family of four in New York City, this translates to an annual income of $31,200 or less.
This debt relief program, which will be implemented without an application process, promises to deliver a substantial impact. Qualifying individuals will simply receive a notification by mail informing them of their debt cancellation. The average relief per person, assuming 500,000 residents benefit, is projected to be around $4,000.
RIP Medical Debt’s track record includes the elimination of over $10.4 billion in debts for more than seven million families and individuals across various initiatives. A notable example is their work in Cook County, Illinois, where they erased over $280 million in debt for more than 158,000 residents.
The issue of medical debt has been a significant concern in New York, with a 2020 report highlighting over 40,000 lawsuits filed against patients for outstanding debts between 2015-2020. Additionally, the state’s largest hospital system, Northwell Health, faced scrutiny for suing patients during the COVID lockdowns, leading them to retract all legal claims from 2020. Governor Kathy Hochul’s recent legislation, which prevents healthcare organizations from reporting medical debts to credit agencies, also aligns with these efforts to mitigate the burden of medical debt.
Mayor Adams emphasized the broader impact of this initiative, noting that reducing this financial strain helps prevent individuals and families from falling into homelessness or relying on city safety nets. This move is a significant step towards addressing a critical issue affecting the livelihood and well-being of countless New Yorkers.
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