In January 2024, Mayor Adams announced that New York City will invest $18 million to purchase and forgive more than $2 billion in medical debt held by approximately 500,000 working-class New Yorkers (New York City Office of the Mayor, n.d.). In addition to this cancellation of medical debt, it was announced in the subsequent State of the City that the City intends to expand the reach of NYC Financial Empowerment Centers by embedding additional financial counselors in New York City hospitals, specifically in NYC Health + Hospitals locations, including hospitals and Gotham Health Centers, with a focus on clinics in the Bronx, Brooklyn and Queens.
This expansion will provide one-on-one assistance to New Yorkers with new, current and/or past due medical bills including debt from ambulance transportation, a type of medical debt that is not being forgiven under the City’s investment and that is causing them a considerable amount of financial stress. According to a 2021 Community Service Society report, 52,000 New York State residents were sued by nonprofit hospitals between 2015 and 2020 for a median amount of $1,900. Further, between 2017 and 2018, 56 nonprofit hospitals, which received more than $442 million in state funding, imposed 4,880 liens on the homes of patients with outstanding medical bills (Community Service Society, 2021). These hospitals fully understand the financial struggle being faced by working-class New Yorkers and still persecute them focusing on disenfranchisement and criminalization. The regulatory framework surrounding medical debt has also recently changed on both the state and local level, and navigating what protections consumers may now have against collection actions taken on medical debt can also be overwhelming for people already in financially precarious situations. A situation that debt relief efforts face are challenging the systemic inequity that is ever-present in low-income communities. By not altering the very system that enabled financial insecurity and struggle, it will continue to harm families and groups of people who aren’t economically stable. Debt relief programs as we know it don’t end the cycle, but temporarily halt its effects.
Mayor Adams’ debt relief program that will help 500,000 New Yorkers will alleviate financial hardship, battling the effects of systemic inequity in the health system; however, it doesn’t stop the issue that would end the need for debt relief in the first place. One solution to end the inequity in the health system is through the decommodification of healthcare; by eliminating economic dependency on health-related resources and regard it as essential services, it would become equitable for everyone. Another solution is universal healthcare that other countries have already successfully implemented for their citizens; by allowing any citizen access to quality health-related resources, it will become equitable for all citizens. City-supported financial counseling via Financial Empowerment Centers can also support New Yorkers who have medical debt which can contribute to adverse mental health impacts and medical care avoidance (Consumer Financial Protection Bureau, 2022), but it will also address financial health needs in a co-located medical setting.
Recent studies have shown that co-locating financial support services in medical settings can lead to improved health outcomes such as adherence to recommended preventive care pediatric visits and vaccinations in the first 6 months of life for pediatric patients (Rubin, 2023). To support financial counselors in addressing medical debt challenges experienced by New Yorkers, DCWP OFE seeks an MBWE contractor to conduct a landscape analysis on New Yorker’s experiences with medical debt and medical debt assistance programs and develop a resource guide for managing medical debt and pursuing assistance programs.
New York City isn’t the first to create debt relief programs for its residents. Counties and states across the country have forgiven medical debts that have been collected by Black and Latino communities in recent years. Cook County in Chicago, Illinois had forgiven $1 billion in medical debts for over 200,000 low and moderate income residents with $12 million from Federal COVID relief in July 2022 (Schutsky, 2024). Arizona invested around $30 million to forgive the debts of over 1 million residents that collectively reached over $1 billion in March 2024 (Office of the Governor, 2024). The cost to eliminate debts varies on its age, region, and organization willing to cancel the debt. In Cook County, Chicago, $1 of debt was forgiven for every 1.2 cents provided because the debt was older and in low-income communities (Treuhaft & Thomas, 2024). The Arizona State program forgave $1 of debt for every 1.5 cents provided because of the debt being recent and focused on the entire state rather than one region (Schutsky, 2024). Debt forgiveness programs have previously not been advantageous for the citizens of local governments as money can be redirected toward other issues instead of the original debt relief.
This can be seen in Buffalo, New York, in July 2021 as Buffalo’s Common Council approved $11 million to be used toward residential water bill debt but instead used the money toward roads, infrastructure, and capital upgrades (Kirkpatrick, 2024). The government did not do as they originally promised to its residents and likely led to distrust within the community. Debt forgiveness programs done by local and state governments can alleviate a tremendous amount of economic hardship off of struggling families when done correctly. Not only do these reduce stress, but allow opportunity for people to invest money and time into other aspects of their lives like food, housing, family, etc. These reflect aspects of social justice as many debt relief programs similar to Chicago and Arizona focus on low-income and marginalized communities. Many low-income and marginalized communities within New York City are the working and non-working class, so Mayor Adams focusing on financial alleviation toward those communities provides a form of social justice by government to local residents. By economically assisting the minority people that need the relief, communities in turn can be financially strengthened.
Mayor Adams’s medical debt relief program hopes to alleviate over 500,000 working class New Yorkers of their financial struggles. When comparing what has happened in other cities across America, residents hope to have an experience where the government delivers what they say to the community. NYC Financial Empowerment Centers focusing on supporting the local community with financial counselors work toward solutions toward medical debt so it wouldn’t continue, breaking the cycle. By assisting the community and supporting them in their economic struggles, the people can in turn become stronger financially.
References
Consumer Financial Protection Bureau. (2022, March). Medical debt burden in the United States.
Community Service Society. (2021, November). Discharged into debt: Nonprofit hospitals file liens on patients’ homes (Rep.). Community Service Society of New York.
Governor’s Office, State of Arizona. (2024, March 4). Governor Hobbs launches Affordable Arizona: Tackling medical debt for working families.
Kirkpatrick, H. (2024, December 23). ARP cash meant for water bill debt-relief was used elsewhere, says acting mayor. WBFO-FM.
New York City Office of the Mayor. (n.d.). Canceling medical debt for New Yorkers. NYC.gov.
Rubin, R. (2023). Medical debt in the US: The “No. 1 cause of bankruptcy.” JAMA, 329(5), 367–369.
Schutsky, W. (2024, March 4). Arizona to spend $30 million to pay residents’ medical debt.Treuhaft, S., & Thomas, A. (2024). The state of government-led medical debt cancellation efforts. The New School’s Budget Equity Project Policy Brief.
Recent Comments