New York City pledged this week to pay down $2 billion worth of residents’ medical debt. In doing so, it has come around to an innovation, started in the Midwest, that’s ridding millions of Americans of health care debt.
The idea of local government erasing debt emerged a couple of years ago in Cook County, Illinois, home to Chicago. Toni Preckwinkle, president of the county board of commissioners, says two staffers came to her with a bold proposal: The county could spend a portion of its federal pandemic rescue funds to ease a serious burden on its residents.
In 2022, Cook County became the first local government to partner with RIP Medical Debt, a nonprofit group that uses private donor funds to buy up and forgive patient debt.
RIP’s model turns debt collection on its head. Normally, debt collectors buy unpaid bills and then try to collect the money owed. RIP identifies unpaid hospital bills owed by people making up to four times the federal poverty level, then buys that debt on secondary markets or directly from hospitals at a small fraction of the original value. Instead of trying to collect, RIP forgives it — so it simply disappears for the patients.
In the Chicago area, as across the countr …
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New York City pledged this week to pay down $2 billion worth of residents’ medical debt. In doing so, it has come around to an innovation, started in the Midwest, that’s ridding millions of Americans of health care debt.
The idea of local government erasing debt emerged a couple of years ago in Cook County, Illinois, home to Chicago. Toni Preckwinkle, president of the county board of commissioners, says two staffers came to her with a bold proposal: The county could spend a portion of its federal pandemic rescue funds to ease a serious burden on its residents.
In 2022, Cook County became the first local government to partner with RIP Medical Debt, a nonprofit group that uses private donor funds to buy up and forgive patient debt.
RIP’s model turns debt collection on its head. Normally, debt collectors buy unpaid bills and then try to collect the money owed. RIP identifies unpaid hospital bills owed by people making up to four times the federal poverty level, then buys that debt on secondary markets or directly from hospitals at a small fraction of the original value. Instead of trying to collect, RIP forgives it — so it simply disappears for the patients.
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