New York City has pledged to pay off $2 billion in medical debt for its residents, following the lead of other local governments using federal pandemic rescue funds for debt relief. This innovative approach began in Cook County, Illinois, in 2022 when the county partnered with RIP Medical Debt, a nonprofit that forgives patient debt by purchasing it on secondary markets or directly from hospitals. Instead of collecting payments, RIP erases the debt, benefiting residents who earn up to four times the federal poverty level.
The model has since inspired cities like Akron, Cleveland, New Orleans, and Washington, D.C., as well as Wayne County, Michigan. New York City Mayor Eric Adams highlighted how medical debt disproportionately impacts Black and Hispanic communities, often forcing working-class families to choose between essentials and health care costs. For many, even those with insurance, one unexpected medical bill can lead to overwhelming financial strain.
RIP’s approach has proven cost-effective, erasing at least $100 in debt for every $1 of government funding. Despite these efforts, Allison Sesso, CEO of RIP Medical Debt, acknowledges that systemic issues—such as high hospital costs and inadequate insurance—continue to drive the medical debt crisis. Over 100 million Americans carry some form of health care debt, which discourages preventive care and worsens health outcomes.
Local governments are also taking steps to address underlying causes. For example, Milwaukee County is working to automate financial assistance enrollment for eligible patients, reducing barriers to accessing care. These initiatives are shedding light on the broader issue of medical debt and sparking conversations about solutions, such as expanding insurance coverage and improving affordability. As medical debt relief gains momentum, advocates hope it will lead to lasting changes in how health care costs are managed in the U.S.
