Press Release
Statement: Relief Coming for New Yorkers Struggling with Medical Debt
Three-quarters of all medical debt is from hospital debt, which unfortunately leads many New Yorkers to take out loans, rack up credit card debt or avoid seeking health care altogether. Indeed, a 2022 state poll found that 41 percent of respondents said they appealed or paid a medical bill they didn’t think they owed for fear of being placed in collections or being sued. Not surprisingly, low-income Black and Latino households face much higher debt burdens, putting their financial security at risk.
Yesterday, Mayor Adams announced that his administration would take steps to help New Yorkers struggling with medical debt by investing $18 million in a “one-time” initiative aimed at relieving up to $2 billion in medical debt over three years for a half million New Yorkers. To be eligible for relief, a patient’s household income must be at or below 400 percent of poverty or have medical debt equaling five percent of their annual income.
The city’s partner on the initiative is RIP Medical Debt, a nonprofit that specializes in purchasing bundled medical debt portfolios from hospitals, medical providers and other commercial entities. According to the mayor’s office, patients who qualify for relief will be notified; there is no application process.
Both the mayor and RIP Medical debt’s CEO acknowledged that this initiative is not a solution to New York’s medical debt crisis. That will require taking on the root causes of medical debt, including reining in predatory medical debt collection practices, modernizing confusing and out of date Hospital Financial Assistance Law, and creating a more equitable healthcare system. But the mayor deserves credit for putting resources behind eliminating medical debt for New Yorkers who are struggling.
Governor Hochul and state lawmakers have also taken action to blunt the devastating impacts of medical debt on New Yorkers. In the last two years, the state has enacted four bills into law to address medical debt, including prohibiting credit bureaus from reporting on medical debt, banning facility fees, and preventing healthcare providers from placing liens on patients’ homes and garnishing their wages in medical debt cases. These measures will provide relief to New Yorkers from medical debt and protect them from accruing medical debt in the future. This year, modernizing the antiquated Hospital Financial Assistance Law and banning hospitals from suing low- and moderate-income people are on the agenda. CSS stands ready to support these and other related efforts aimed at achieving meaningful medical debt reform.
###