New York City Mayor Eric Adams and New York City Department of Health and Mental Hygiene (DOHMH) Commissioner Dr. Ashwin Vasan today announced a pioneering medical debt relief program, that will invest $18 million over three (3) years to relieve over $2 billion in medical debt for hundreds of thousands of working-class New Yorkers. Medical debt — the number one cause of bankruptcy in the United States — disproportionately affects uninsured, under-insured, and low-income households, and the city’s program would wipe out debt for up to 500,000 New Yorkers on a one-time basis. The city will partner with RIP Medical Debt, a national, New York City-based nonprofit specializing in buying and ultimately wiping out medical debt to acquire debt portfolios and retiree debt from health care providers and hospitals across New York City. Affected New Yorkers will then be notified that their medical debt has been relieved; there is no application process for this program. The one-time debt relief program, the largest municipal initiative of its kind in the country, will launch in early 2024 and run for three years.
“Getting health care shouldn’t be a burden that weighs on New Yorkers and their families,” said Mayor Adams. “Since day one, our administration has been driven by the clear mission of supporting working-class New Yorkers and today’s investment that will provide $2 billion in medical debt relief is another major step in delivering on that vision. 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. 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.”
“For hundreds of thousands of New Yorkers and for millions of Americans, medical debt creates anxiety, uncertainty, and stress,” said Deputy Mayor for Health and Human Services Anne Williams-Isom. “It weighs not only on individual and familial balance sheets, but may cause some to put off additional care and limits upward financial mobility. New York City’s investment through this partnership will help working people and families advance their health and financial well-being so they can thrive, instead of just survive. Furthermore, we realize this issue is part of a larger complex health care system and we look forward to continuing to advocate for systemic changes to help New Yorkers avoid medical debt in the future.”
“Throughout my career as a doctor, I have seen first-hand how high health care costs and medical debt can force patients to make impossible choices,” said DOHMH Commissioner Dr. Ashwin Vasan. “No one in New York City, or in America, in 2024, should have to choose between getting the health care they need and paying their rent or buying food to feed their families. But as a provider, I have seen all-too-often patients who delay or forgo lifesaving care because of fear of high costs leading to debt. 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. As a physician and advocate, I know medical debt is killing New Yorkers and killing our economy, and today, this city is stepping up to say that the people deserve better.”
“It’ is gratifying to see this collaboration come together since RIP Medical Debt was founded here in New York City,” said Allison Sesso, president and CEO, RIP Medical Debt. “Medical debt is a failing of the system writ large, not people. Beyond creating often unpayable financial burdens, medical debt undermines one’s mental health as well. By making future care more accessible, this initiative aligns well with hospitals and health systems’ community benefit and health equity efforts.”
“Medical debt impacts tens of thousands of New Yorkers, preventing them from saving for the future,” said New York City Department of Consumer and Worker Protection Commissioner Vilda Vera Mayuga. “This new partnership with RIP Medical Debt will transform the lives of New Yorkers and their families, providing much needed relief and stability. Thank you to the mayor, DOHMH Commissioner Vasan, RIP Medical Debt, and the Mayor’s Office for Economic Opportunity for prioritizing the needs of some of our most vulnerable neighbors.”
“Our unique poverty measure for New York City identifies out-of-pocket medical expenses as a consistent force keeping New Yorkers in poverty,” said Carson Hicks, acting executive director, Mayor’s Office for Economic Opportunity. “High medical expenses often mean high levels of debt. Our research has found that the pool of people eligible for debt relief includes both low- and middle-income households across all boroughs. Medical debt relief is an important step towards increased economic security for many New Yorkers.”
“In New York, we believe that health care is a right and that no New Yorker should worry about barriers to accessing the high-quality health care they need,” said Mitchell Katz, MD, president and CEO, NYC Health + Hospitals. “Our health system has reduced barriers and encouraged all New Yorkers — regardless of their ability to pay or immigration status — to access primary care as their pathway to their healthiest life.”
“The overwhelming impact of medical debt on hundreds of thousands of New Yorkers and their families goes beyond a financial burden and can become debilitating in other areas of their lives” said Marcella Tillett, executive director, Mayor’s Fund to Advance New York City. “Mayor’s Fund to Advance New York City is excited to partner with the City of New York and RIP Medical Debt on this groundbreaking Medical Debt Relief Program which will give New Yorkers access to greater financial health and combat other impacts of medical debt, including experiences of great emotional distress and feelings of there being barriers to continued engagement in health services.”
RIP Medical Debt will purchase bundled medical debt portfolios from providers like hospitals and commercial debt buyers to then abolish that debt at pennies on the dollar. Debt relief recipients will then be notified that their debt has been bought by a third party and erased, with no strings attached. Recipients owe nothing on the debt and face no tax penalty. New Yorkers who fit one of the two eligibility criteria will qualify for the debt relief announced today, if their debt has been acquired: 1) having annual household income at or below 400 percent of the Federal Poverty Line or 2) having medical debt equal 5 percent or more of their annual household income.
To supplement the city’s investment, RIP Medical Debt and the Mayor’s Fund to Advance New York City will also partner to raise additional funding over three years. New Yorkers interested in helping relieve medical debt can donate online.
More than 100 million Americans hold some medical debt, with the total amount nationwide exceeding $195 billion. Carrying medical debt can undermine financial stability and mobility, as it can affect credit scores and put individuals and families in difficult positions to choose between care and other needed expenses. Black and Latino communities are 50 percent and 35 percent, respectively, more likely to hold medical debt than their white counterparts, and while medical debt may be held by those without insurance, even those with insurance are at risk of carrying medical debt.
“In the world’s wealthiest nation, medical debt should not be the reason that people struggle to make ends meet,” said U.S. Representative Dan Goldman. “I applaud New York City’s $18 million investment in its residents, ensuring that nearly 500,000 will be released from the shackles of medical debt. ‘New York Strong’ must also mean ‘New York Healthy,’ and I’m proud of the work we’re doing to make sure every New Yorker can care for their health without facing insurmountable financial burdens.”
“Too many Americans continue to struggle with medical debt for receiving the care they need which impacts the financial stability of working families who are often forced to choose between making payments and affording needed expenses,” said U.S. Representative Grace Meng. “That is why this new program is so important for our city. It will provide relief for hundreds of thousands of New Yorkers, throwing them a much-needed lifeline. I thank Mayor Adams and RIP Medical Debt for launching this crucial partnership.”
“We applaud Mayor Adams for this tremendous effort to relieve medical debt for so many New Yorkers who deserve continued access to the care they need,” said Michael Dowling, president and CEO, Northwell Health. “As New York’s largest health care provider, we remain committed to providing quality care to all patients in need, regardless of their ability to pay. For more than a decade, we have offered financial assistance to patients based on incomes 500 percent above the federal poverty level and we will continue to support any measure that helps us do more. We stand with the city in raising the health of all New Yorkers and keeping health care affordable for all.”
“We recognize that medical debt can be devastating for many families across the country. We support efforts to reduce medical debt and thank the mayor for highlighting this important issue,” said Brendan G. Carr, MD, MA, MS, chief executive officer, Mount Sinai Health System.
“I applaud the Adams administration for investing in New Yorkers’ health by unburdening them from medical debt,” said Oxiris Barbot, MD, president and CEO, United Hospital Fund; Board Member, RIP Medical Debt; former DOHMH commissioner. “The benefit of debt relief is more than financial. It gives patients peace of mind and ensures they seek the medical care they need. As we strive collectively toward a health system that promotes health equity, I encourage all New York City hospitals not only to participate in this partnership but commit to further enhancing their robust financial assistance policies so that patients don’t have to incur unnecessary medical debt in the first place.”
“Medical debt has the potential to devastate families who are trying to recover from catastrophic illness or debilitating chronic conditions. This is especially the case for low-income families and BIPOC communities, making medical debt a critical health equity issue,” said Dr. Ann Kurth, president, The New York Academy of Medicine. “The mayor’s new debt-relief initiative provides much needed assistance to enable families to not only support their loved one’s short-term physical recovery, but it can provide for a path forward for families to thrive.”
“We applaud Mayor Adams and his administration for making medical debt relief a top priority for those in greatest need. At Episcopal Health Services, we recognize daily the significant burden mounting health care costs have on our patients and our community. We wholeheartedly support this measure, understanding it will have a significant positive impact on the lives and wellbeing of those we serve,” said Gerard M. Walsh, CEO, Episcopal Health Services.
“In a world where homelessness can touch anyone, from those born into poverty to those with privilege, we face the stark reality that a medical emergency can threaten someone’s financial stability,” said Shams DaBaron, homelessness and housing advocate. “The prevailing notion that homelessness stems solely from mental illness and substance abuse overlooks the struggles of hardworking New Yorkers burdened by the exorbitant costs of healthcare. Today, Mayor Eric Adams and Commissioner Dr. Ashwin Vasan’s groundbreaking medical debt relief program offers hope to those shackled by medical debt. I commend Mayor Adams and his administration for addressing the root causes of poverty, fostering independence, and employing innovative solutions. Their commitment reinforces New York City’s position as the greatest city in the world.”
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