Mayor Adams Relieves $80 Million in Medical Debt for Working-Class New Yorkers

January 17, 2025

Pioneering Program Launched by Mayor Adams Relieves Medical Debt for
35,000 New Yorkers in Partnership with Undue Medical Debt

New York City's Investment Will Provide $2 Billion in Relief for up to 500,000 New Yorkers,
Becoming Largest Municipal Medical Debt Relief Program in Nation

NEW YORK - New York City Mayor Eric Adams and New York City Department of Health and Mental Hygiene (DOHMH) Acting Commissioner Dr. Michelle Morse today announced that, beginning this week, 35,000 New Yorkers will start receiving letters notifying them that their medical debt has been eliminated by a pioneering program launched by Mayor Adams last year- clearing $80 million in debt. Medical debt - the number one cause of bankruptcy in the United States - disproportionately affects uninsured, under-insured, and low-income households, and 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 on a one-time basis.

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 and retiree debt from health care providers and hospitals across New York City. 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.

"Working-class families should not have to choose between paying medical bills and keeping a roof over their heads, and thanks to our administration, they won't have to," said Mayor Adams. "With this debt relief program, our administration is following through on its promise to relieve $2 billion in medical debt, starting with putting $80 million back in the pockets of working-class New Yorkers this week alone. Our administration is committed to making New York City more affordable and the best place to raise a family."

"In thousands of mailboxes this week, New Yorkers will find a letter from Mayor Adams and our partner, Undue Medical Debt, stating that their outstanding medical debt has been abolished," said Deputy Mayor for Health and Human Services Anne Williams-Isom. "A total of 35,000 constituents will receive letters relieving $80 million in total debt. It is the first round of relief for a program set to touch roughly half a million New York City residents in the coming months and years. As we work toward structural change in our health care system to help people avoid debt in the first place, we are doing our part right now to help individuals and families thrive free from medical debt."

"Receiving life-saving medical care should not lead to financial stress, yet, countless New Yorkers have faced that reality for years," said DOHMH Acting Commissioner Dr. Morse. "We are eager to get much needed debt relief to as many New Yorkers as possible, as soon as possible. We look forward to reaching our goal of 500,000 New Yorkers over the next three years so that those hardest hit by medical debt can instead focus on what matters most: their health and wellness."

"As a national nonprofit based in the borough of Queens, I'm proud to be partnering with the City of New York to bring medical debt relief to our neighbors and community members who are burdened by the financial and emotional toll of medical debt," said Allison Sesso, CEO and president, Undue Medical Debt. "We look forward to more rounds of medical debt relief by collaborating with local providers and hospitals to build on their financial assistance and community benefit programs through the removal of these debts. While we know medical debt relief isn't a silver bullet, it provides patients a clear runway for re-engaging in the health care system by quickly and efficiently removing an unnecessary barrier to care. We are excited to bring this unique model to our city."

Undue Medical Debt will purchase bundled 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 announced today if their debt has been acquired: 1) having 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.

To supplement the city's investment, Undue Medical Debt and the Mayor's Fund to Advance New York City will also partner to raise additionalfunding over three years in order torelieve more medical debt. New Yorkers interested in helping relieve medical debt can donate online.

More than 100 million Americans hold some medical debt, with the total amount nationwide exceeding $195 billion. Carrying medical debt can undermine financial stability and mobility, as it can affect credit scores and put individuals and families in difficult positions to choose between care and other necessary expenses. Black and Latino communities are 50 percent and 35 percent, respectively, more likely to hold medical debt than their White counterparts, and while medical debt may be held by those without insurance, even those with insurance are at risk of carrying medical debt.

"By eliminating $80 million in medical debt for 35,000 New Yorkers, this initiative is directly addressing one of the most significant financial burdens people face," saidNew York State Assemblymember Nily Rozic. "For many families, medical debt can feel like an insurmountable obstacle, impacting their ability to save, invest in their future, or simply get by. This relief will help ease that pressure and provide much-needed breathing room for those who need it most."

"I commend Mayor Adams and Acting Commissioner Morse for delivering vital financial relief to half a million of our fellow New Yorker," said New York State Assemblymember Jenifer Rajkumar. "Medical debt is the number one cause of bankruptcy, falling particularly hard on the uninsured, low-income households, and people of color. By spending $18 million to acquire debt portfolios and retiree debt from providers, this administration is wiping away over $2 billion in medical debt-an 11,000 percent return on investment. Today marks the historic first phase, clearing $80 million in debt for 35,000 New Yorkers. At a time when affordability is on the top of everyone's minds, this program will put money back in New Yorkers' pockets so they can stand on their own two feet. It will also relieve them of harassment from debt collectors, ruined credit records, and devastating lawsuits. This groundbreaking program will lift the weight of medical debt off the shoulders of hundreds of thousands of working-class New Yorkers, opening the door to financial freedom and economic empowerment in our city."

"No individual should ever be saddled with crippling debt that threatens to leave them in financial ruins, simply because they fell victim to injury or illness," said Queens Borough President Donovan Richards Jr. "Crushing medical debt has destroyed countless families across this nation and held back entire generations of Americans, a scourge that can no longer be allowed to continue in the richest nation on earth. I commend the administration for taking this critical action in relieving medical debt for tens of thousands of working-class New Yorkers who otherwise were potentially facing fiscal calamity. This program will help lift New Yorkers out of poverty and put them on paths to prosperity that should never be derailed because they got sick."

"When working as a registered nurse, I often witnessed the stress and fear that medical bills caused patients and their families, frequently preventing the sick from seeking the care they so desperately needed," said New York City Councilmember Mercedes Narcisse. "I am proud to support this program that puts people's health and well-being above financial strain. Every New Yorker deserves the chance to prioritize their well-being without the shadow of debt looming over them."

"Many New Yorkers struggle with medical debt and stop accessing medical care for fear of falling into a deeper financial hole," said New York City Councilmember Lynn Schulman, chair, Health Committee. "That is why the city's partnership with Undue Medical Debt, to acquire debt portfolios and retiree debt from healthcare providers and hospitals throughout New York City, is so crucial in keeping working families financially stable and healthy. An initial debt relief of $80 million is historic for a city like New York and I thank Mayor Adams for his commitment to making healthcare affordable to those who are most in need."

"Undue Medical Debt is making a profound impact by relieving the crushing burden of medical debt for countless New Yorkers, and helping them regain control of their financial lives," said Justine Zinkin, CEO, Neighborhood Trust Financial Partners. "At Neighborhood Trust Financial Partners, we see every day how medical debt traps individuals in cycles of insecurity, forcing them to delay essential health care and other basic needs. That's why we're proud to support Undue Medical Debt's vital partnership with New York City; by abolishing medical debt, this program will empower people to move forward financially and restore their access to the care and resources they deserve."

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