New York City Mayor Adams announced on Wednesday that the city government is prepared to invest $18 million to further provide medical debt relief for tens of thousands of New Yorkers. Since the launch of this program last year, it has already canceled $135 million in medical debt for 75,000 residents. The future goal is to assist 500,000 residents in alleviating or eliminating debt pressure through a one-time arrangement.
In addition, Adams also declared the establishment of eight financial service centers within the municipal hospitals in four boroughs to offer residents more financial counseling and medical-related support.
This medical debt relief program is executed through a collaboration between the city government and the non-profit organization “Undue Medical Debt.” The organization acquires debt portfolios from hospitals, medical facilities, and collection agencies through “low-cost purchasing” and then cancels them.
The city government emphasizes that residents do not need to apply. Once their debt falls within the acquisition scope, they will receive notification informing them that a third party has settled and canceled their debt, without incurring additional fees or tax burdens.
Residents whose debt is acquired will automatically receive relief if they meet either of the following criteria: (1) household income not exceeding 400% of the federal poverty line annually; (2) medical debt amounting to more than 5% of the household’s annual income.
Adams stated, “For too long, medical debt has not only prevented many citizens from accessing necessary medical services but has also become a heavy economic and emotional burden on families. Working-class New Yorkers should not have to fear bankruptcy due to illness. Through our efforts, they no longer have to worry.”
Dr. Michelle Morse, Acting Commissioner of the New York City Department of Health, pointed out, “Eliminating medical debt is not only an act of compassion but also a necessary measure. Too many New Yorkers have had to make difficult choices between their health and basic necessities such as food or housing. By reducing debt, we enable residents to prioritize their health and make the city fairer and more resilient.”
According to data from the National Institutes of Health, approximately 9% of the population nationwide owe over $250 in medical expenses. Experts highlight that medical debt weakens the financial stability of households, impacts credit scores, and even forces people to delay seeking medical care.