By Forum Staff
Mayor Eric Adams on Wednesday announced that the City will cancel nearly $135 million in medical debt for 75,000 New Yorkers.
Last year, the City launched a pioneering program that — through an $18 million investment by the City over three years — will relieve some or all of the medical debt for 500,000 working-class New Yorkers on a one-time basis, totaling over $2 billion in eliminated debt. In addition, Adams this week celebrated the opening of eight new NYC Financial Empowerment Centers run by the City Department of Consumer and Worker Protection at select NYC Health + Hospitals locations across the health system.
According to the administration, medical debt is the number one cause of bankruptcy in the United States, disproportionately affecting uninsured, under-insured, and low-income households. The city has partnered with Undue Medical Debt, a national New York City-based nonprofit specializing in buying and ultimately wiping out medical debt to acquire debt portfolios from health care providers and hospitals across New York City, as well as from collection agencies.
There is no application process for New York City’s one-time debt relief program, which is the largest municipal initiative of its kind in the country. Instead, Undue Medical Debt will purchase bundled, qualifying 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 if their debt has been acquired: 1) having an annual household income at or below 400 percent of the Federal Poverty Line or 2) having medical debt equal to 5 percent or more of their annual household income.
NYC Financial Empowerment Centers provide free one-on-one financial counseling and coaching services to help New Yorkers reach their financial goals. The Financial Empowerment Centers can help New Yorkers learn how to create action plans and take small but meaningful steps to manage their money, establish or improve their credit, set up a spending plan, open a safe and affordable bank account, contact their lenders about debt, including student loans and medical debt, develop a strategy to reduce debt or lower payments, and more.
Queens residents can now access free one-on-one financial counseling and coaching services at NYC Health + Hospitals/Elmhurst and NYC Health + Hospitals/Queens.
“Erasing medical debt isn’t just a gesture of compassion — it’s a necessity when so many New Yorkers are often forced to choose between their health and basic needs like food or housing,” said New York City Department of Health and Mental Hygiene Acting Commissioner Dr. Michelle Morse. “We must create a more equitable and affordable system so that New Yorkers do not fear financial ruin after seeking necessary medical care. By relieving debt burden, we’re providing people with the freedom to prioritize their health while making our city stronger and more accessible for everyone.”
