Medical debt canceled for 62,000 D.C. residents

The medical debts of 62,000 District residents, $42 million in total, were canceled through the use of city taxpayer dollars and a national nonprofit fund.

Starting Friday, residents whose medical debt was purchased and paid for through the funds will receive letters from the national nonprofit Undue Medical Debt, said Tzedek DC, the local nonprofit that helped arrange the cancellation.

Debt cancellation is not something people apply for. Instead, bundled debts were bought in large portfolios using money from a 2023 grant.

In this case, the debts were bought from medical providers and cost the city only about $225,000, city officials told WRC-TV.

D.C. Mayor Muriel Bowser, a Democrat, said that erasing debt "just makes sense."

"This is a way for us to get life-changing financial help to a large number of people, in the most efficient way possible. We're grateful for our partners who worked with us to relieve tens of thousands of Washingtonians from the burden of medical debt," she said.

To qualify for the debt relief, a city resident either had to have an annual income of up to four times the federal poverty level or have medical debts costing 5% or more of their annual income. Before the cancellation, about 90,000 District residents struggled with medical debt, Tzedek DC said.

Of the $42 million used, $26 million went to debt held by people making $25,000 a year or less, city officials told the TV station.

Tzedek DC did not specify whether the federal poverty level calculation was based on an individual income or the income of an eligible person's entire household.

The nonprofit also clarified on its website that some people receiving debt relief will still have some outstanding medical debt.