City program to forgive medical debt begins

January 21, 2025 Brooklyn Eagle Staff

A doctor sits with a patient. Photo: rogerphoto/Adobe Stock

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CITYWIDE – MAYOR ERIC ADAMS and city Department of Health and Mental Hygiene Acting Commissioner Dr. Michelle Morse on Friday announced that a new program designed to help relieve medical debt burdens for city residents is bearing fruit. According to a press release from the city, last week, 35,000 New Yorkers started receiving notice that their medical debt was eliminated, clearing a total of $80 million in debt. The city last year partnered for the program with Undue Medical Debt (formerly RIP Medical Debt), a Queens-based nonprofit specializing in wiping out medical debt.

Medical debt is frequently sold at pennies on the dollar, due to its riskiness as an investment: debtors are frequently unable to repay lenders. Undue purchases medical debt in bulk from providers, like hospitals and commercial debt buyers, and erases it, with no strings attached. Debtors are then notified, and will owe nothing and face no tax penalty. There is no application process for the program, which is the largest municipal initiative of its kind in the country. New Yorkers will qualify if they have either an annual household income at or below 400 percent of the Federal Poverty Line, or medical debt equal to 5% or more of their annual household income.

Medical debt is the number one cause of bankruptcy in the U.S., and disproportionately affects uninsured, under-insured and low-income households, according to the city. The city’s investment of $18 million over three years will relieve a total of over $2 billion in medical debt for 500,000 working-class New Yorkers. To supplement the city’s investment, Undue Medical Debt and the Mayor’s Fund to Advance New York City will also partner to raise additional funding. New Yorkers interested in helping relieve medical debt can donate online.

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