DC eliminates $42 million in medical debt for 62,000 residents

Washington, D.C., partnered with a nonprofit group called Undue Medical Debt to cancel $42 million in unpaid bills for thousands of residents.

Undue Medical Debt was directed by Washington to negotiate with hospitals in the district in buying the medical debts belonging to 62,000 residents.

This is not a program residents can apply for. Instead, their debt is automatically canceled if they qualify. Residents who were eligible for the debt cancellation program either earned up to four times the federal poverty level or their medical debt was at least 5% of their income, city officials said. The city found that 60% of total debt cancellation will assist residents making $25,000 or less and that 80% of residents live in Washington ZIP codes that are predominantly black or Latino.

“We know that in D.C. and across the country, medical debt has become a burden that follows too many families around and holds people back from ever getting their fair shot — especially people of color,” Mayor Muriel Bowser said Thursday in a statement. “Erasing medical 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.”

The only hospitals that agreed to sell the debt were MedStar's Washington Hospital Center, Northwest D.C. rehabilitation hospital, and Georgetown hospital, according to the Washington Post. Because the federal government reimburses hospitals for 65% of outstanding bills, D.C. Deputy Mayor for Health and Human Services Wayne Turnage said it made sense that more hospitals didn't participate in the program.

“Hospitals have this very difficult job of taking care of often very sick people,” Turnage said. “And their margins are not what they used to be. So if they elect to chase the 65% reimbursement ... I fully understand the business calculation.”

A KFF poll found that 41% of adults have medical debt.

Washington announced in March 2023 that it plans to eliminate $90 million in residents’ medical debt, allocating $900,000 to the initiative.

Washington is not the only area looking to eliminate the medical debt burden of its residents.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

Undue Medical Debt has been contracted by New Jersey, Connecticut, Arizona, Pittsburgh, and New Orleans to relieve residents of medical debt.

On Thursday, Cincinnati announced it would cancel $134 million in debt for 34,000 residents.