(The Center Square) — New York City Mayor Eric Adams is moving to wipe out more than $2 billion in medical debt owed by hundreds of thousands of New Yorkers.
Adams announced earlier this week that the city will spend $18 million in taxpayer funds over the next three years to pay off medical debt owed by more than 500,000 residents. Officials estimate the move will collectively wipe out more than $2 billion of medical debt.
Adams boasted that the debt relief is the largest initiative of its kind in the country and will help hundreds of thousands of struggling working-class New Yorkers who owe money for medical treatment.
“No one chooses to go into medical debt – if you’re sick or injured, you need to seek care,” the Democrat said in a statement. “But no New Yorker should have to choose between paying rent or for other essentials and paying off their medical debt.”
Under the one-time program, the city will hire RIP Medical Debt, a New York City-based nonprofit specializing in buying and wiping out medical debt to acquire debt portfolios and retiree debt from health care providers and hospitals across New York City.
Those New Yorkers who qualify will be notified that their medical debt has been relieved, and there is no application process or fee for the program, the Adams administration said.
“Medical debt is a failing of the system writ large, not people,” Allison Sesso, president and CEO of RIP Medical Debt, said in a statement. “Beyond creating often unpayable financial burdens, medical debt undermines one’s mental health as well.”
To help pay for the program, the Adams administration says it will be soliciting private donations to raise additional funding and offset the costs to taxpayers over the next three years.
Nationally, an estimated 19% of American households have medical debt, with a median of $2,000 owed, according to data from the U.S. Census Bureau.
Medical debt disproportionately impacts Black and Latino families – 27.9% of Black families and 21.7% of Latino families have medical debt, compared to only 17.2% of white households, the data shows.
More than one in four households with at least one member with a disability have medical debt, compared to 14.4% of households with no members with disabilities. About 31% of households with a member in poor health have medical debt, compared to 14.4% of those with family members in good health, according to Census data.
Nearly 60% of all debt held by collection agencies is medical debt owed by some 43 million households, according to the Consumer Financial Protection Bureau.