New York City, in collaboration with the New York-based nonprofit RIP Medical Debt, has launched a substantial initiative to wipe out $2 billion of medical debt for approximately 500,000 residents.
The initiative, described as “life-changing,” was introduced by Mayor Eric Adams on Monday, January 22nd.
The program, set to commence in early 2024 and span three years, will target individuals whose medical debt constitutes at least 5% of their annual household income or those with a household income at or below 400% of the federal poverty line.
The city has committed $18 million over three years to this cause.
RIP Medical Debt will play a pivotal role by purchasing bundled medical debt portfolios from hospitals and commercial debt buyers and then absolving these debts for a fraction of their value.
Mayor Adams emphasized the significance of the program, stating, “Getting health care shouldn’t be a burden that weighs on New Yorkers and their families.”
He further highlighted the administration’s dedication to working-class New Yorkers, remarking, “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.”
The mayor continued, “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.”
Beneficiaries of this program will be informed of their debt cancellation without any conditions or application processes, alleviating a major financial concern for many.
Deputy Mayor for Health and Human Services Anne Williams-Isom said, “For hundreds of thousands of New Yorkers and for millions of Americans, medical debt creates anxiety, uncertainty, and stress.”
“New York City’s investment through this partnership will help working people and families advance their health and financial well-being so they can thrive, instead of just survive,” Williams-Isom added.
This initiative is particularly poignant given that medical debt is the leading cause of personal bankruptcy in the U.S., with over 100 million Americans grappling with approximately $195 billion in medical debt, as reported by the Kaiser Family Foundation in 2022.