A new multi-million dollar venture by New York City officials is expected to wipe the medical debts of some 500,000 New Yorkers, Mayor Eric Adams announced Monday.
The “pioneering medical debt relief program” is slated to clear more than $2 billion in debts over the next several years through a partnership with RIP Medical Debt.
“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,” Adams said in a statement.
“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.”
The one-time debt relief program launches early this year and is expected to run for three years.
Through an $18 million investment, the city and RIP Medical Debt will buy up debt portfolios from health care providers and hospitals in the city. According to the plan, there is no application process. Affected New Yorkers will simply be notified if and when their debt has been relieved.
Qualifying New Yorkers must have a household income at or below 400% of the Federal Poverty line or have medical debt equal to at least 5% of their income.
In its announcement, the City aims to supplement part of its investment through additional fundraising efforts.
City Health Commissioner Dr. Ashwin Vasan said people should not be forced to choose between paying rent or getting necessary health care services.
“Medical debt caused by the exorbitant and ever-rising costs of health care is the number one cause of personal bankruptcy in the United States, and also has our economy on an unsustainable path,” Vasan said in a statement.