New York City Mayor Eric Adams promised that he would eliminate more than $2 billion of medical debt on behalf of upward of 500,000 residents.
Tackling what the mayor’s office called the top cause of personal bankruptcy, Mayor Adams announced that the city would work with a nonprofit to buy medical debt in bulk from both hospitals and debt collectors.
The city announced it would spend $18 million over three years in a partnership with a group called RIP Medical Debt, ABC News reported.
“For middle- and working-class New Yorkers, medical bills can be financially devastating,” Adams said in his announcement. “Working-class families often have to choose between paying their medical bills or some of the basic essentials that they need to go through life.”
The group has reportedly bought debt in bulk for pennies on the dollar in the past and has targeted debt belonging to those with low income. The decision-making process includes finding those whose medical bills are the equivalent of at least 5% of their annual household income, or have an income that is four times under the federal poverty line.
In New York City, that number would be $31,200 for a family of four, according to the New York Times.
The program will have no application process, and those who have their debt erased would simply receive a letter by mail. The $2 billion in relief would equate to $4,000 per person if 500,000 residents benefited from the program.
The nonprofit’s website claimed it has eliminated over $10.4 billion in debt from over seven million families and individuals. Through a program conducted with Cook County, Illinois, for example, the nonprofit reportedly eliminated over $280 million of debt for more than 158,000 residents — an average of just over $1,770 per person.
According to a 2020 report from Community Service Society, New York state had filed over 40,000 lawsuits against patients for outstanding debts between 2015-2020.
The New York Times reported that the state’s largest hospital system, Northwell Health, had also sued patients for unpaid debts during COVID lockdowns. The hospital system later rescinded all legal claims filed in 2020. In December 2023, Governor Kathy Hochul also signed legislation that prevented health care organizations from reporting medical debt to credit agencies.
“That $2 billion trickles down to those households, who are not going to fall into our safety net,” Mayor Adams added. “They’re not going to fall into our homeless system.”
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