Hundreds of thousands of New Yorkers will have their medical debt written off

New York City Mayor Eric Adams and Department of Health and Mental Hygiene Commissioner Ashwin Vasan announced a program on January 22 to help relieve New Yorkers' medical debt burden. Through this initiative, over three years, the city will help pay off nearly $2 billion in medical debt for hundreds of thousands of New Yorkers.

Medical debt is the leading cause of bankruptcy in the United States. Such debt hits uninsured, low-income families the hardest. A new city program will help pay off medical debt for up to 500 New Yorkers. The city will partner with RIP Medical Debt, a nonprofit organization that specializes in purchasing and paying off Americans' medical debts.

The mayor's office and RIP Medical Debt will select program participants themselves; there is no application process. Selected debtors will simply be told that their medical debt has been discharged.

The debt relief program, the largest municipal initiative of its kind in the country, will start in early 2024 and last three years.

“Getting health care should not be a burden for New Yorkers and their families,” Adams said. “From day one, our administration has had a clear mission to support New York's working class, and today's investment, which will provide $2 billion in medical debt relief, is another important step in realizing that vision... No New Yorker will ever have to choosing between paying rent or buying essentials and paying off medical debt.”

How the program works

RIP Medical Debt will purchase New Yorkers' combined medical debt portfolios from hospitals and debt collectors and then cancel those debts on a penny-per-dollar basis. Debtors will then be notified that their debt has been purchased by a third party and canceled without conditions. These people don't have to do or pay anything, and they don't face tax penalties.

The program will select New Yorkers who meet one of two criteria:

• their annual household income is no more than 400% of the federal poverty level;
• their medical debt is equal to or greater than 5% of their annual income.

If you would like to do a good deed and help RIP Medical Debt pay off your debts, please donate to the program here to register:.

More than 100 million Americans have medical debt. The total amount of this debt nationwide exceeds $195 billion. Such debt can negatively impact credit scores and put families in difficult situations, forcing them to choose between paying off debt and meeting basic needs.