NYC to clear $2B in medical debt for 500,000 people

Up to 500,000 New Yorkers will be cleared of their healthcare debt through a new program rolled out by New York City, which will invest $18 million to relieve more than $2 billion in debt. 

The city is partnering with nonprofit RIP Medical Debt to acquire bundled medical debt portfolios from providers like hospitals and commercial debt buyers across New York City. For every $100, RIP Medical Debt abolishes $10,000 of medical debt. The program, announced Jan. 22, will launch in early 2024 and run for three years, over which the city will invest $18 million and raise additional funds to clear more than $2 billion in debt. 

New Yorkers with annual household income at or below 400 percent of the federal poverty line or with medical debt equal to 5% or more of their annual household income are eligible for the program. New Yorkers affected by the initiative will simply be notified that their medical debt is eliminated; there is no application process. 

"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," said New York City Mayor Eric Adams. 

CEOs of New York health systems — NYC Health + Hospitals, Northwell Health and Mount Sinai Health System — applauded the city's program, which Mr. Adams deemed "the largest municipal initiative of its kind in the country." 

In a similar but smaller effort, Cook County in Illinois — which encompasses Chicago — partnered with RIP Medical Debt to acquire and erase $79.2 million in medical debt, benefitting 72,989 county residents.

Medical debt is a widespread challenge for both uninsured and insured adults in the United States, with about 41% holding debt caused by their medical or dental bills, according to 2022 data from KFF.

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