Mayor Eric Adams said on Monday that New York City will buy millions of dollars worth of medical debt and then wipe it out. This is meant to help up to 500,000 residents.
As part of the scheme, hospitals sell their unpaid medical debt to RIP Medical Debt, a nonprofit that gets it at a steep discount and then pays it off. Adams said that the city will spend $18 million to help hundreds of thousands of New Yorkers get out from under more than $2 billion in medical debt.
People in New York who have medical debt will be told that it has been forgiven, as there is no application process for the one-time debt relief program that will start early this year and last for three years.
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“No one wants to get into medical debt, but if you’re hurt or sick, you need to get help.” “But Adams said in a statement that no one in New York should have to choose between paying their rent or other bills and paying off their medical debt.”
The program is for people in New York whose medical bills are at least 5% of their yearly household income or whose income is less than four times the government poverty line, which for a family of four is $31,200.
Medical debt is the main reason people file for bankruptcy in the US. People with low incomes, no health insurance, or not enough insurance are more likely to be affected.
In December, New York Governor Kathy Hochul signed a law that says medics and healthcare workers can’t tell credit agencies about medical bills.
According to its website, RIP Medical, a New York charity that began in 2014, has forgiven more than $10.4 billion in medical debt for more than 7 million people since it began.