New York City is launching an $18 million plan to help low-income New Yorkers pay off their medical debt, addressing a source of economic stress that disproportionately affects Black and Latino people.
The plan could wipe out medical debt totaling more than $2 billion for as many as 500,000 New Yorkers, according to Mayor Eric Adams. The program will launch in early 2024, run for three years, and offer one-time debt relief.
“Working-class families often have to choose between paying their medical bills or some of the basic essentials that they need to go through life,” Adams said Monday during an announcement at City Hall. “And because of the high costs of care, New Yorkers are choosing not to get care at all.”
The program will be run by the nationally recognized nonprofit RIP Medical Debt, which was founded in 2014 and buys medical debt at a fraction of the cost from the secondary debt market.
Participants cannot apply but will be identified as part of the company’s analysis, Adams’ office said. Those selected must have an annual household income of no more than 400% of the federal poverty level — or $120,000 for a family of four — or their medical debt must equal 5% or more of their annual household income.
Studies have shown Black and Latino people are 46% more likely to report past-due medical debt, compared to 13% of white people, according to a 2023 national study by the Urban Institute, a nonprofit think tank.
The Adams administration entered into an agreement with RIP Medical Debt last July, according to the New York Post. On Monday, city officials presented more detailed numbers on the extent of the city’s investment.
The initiative comes after years of growing concern over rising medical bills. Last month, New York Gov. Kathy Hochul signed a series of bills intended to rein in medical costs, including one that would prevent unpaid medical debt from appearing on New Yorkers’ credit reports. Other municipalities adopted similar medical debt elimination programs with RIP Medical Debt several years ago, using federal pandemic aid.
Under the city’s plan, RIP Medical Debt would buy up bundled debt from third-party debt sellers seeking to turn a profit on portfolios of unpaid medical bills.
“We're taking advantage of that pricing and that for-profit model,” said Allison Sesso, president and CEO of RIP Medical Debt, who joined the mayor at the City Hall announcement. “Except we're not trying to make any money back. We are turning it into a charitable purpose.”
