D.C. Mayor Muriel Bowser said Wednesday that the city government will cancel up to $90 million in medical debt for many of the 90,000 residents who have unpaid bills.
The effort is funded by $900,000 in anticipated year-end surplus funds from the fiscal year 2023 budget to address health inequities and racial disparities related to medical care.
Statistics show that D.C. residents of color are three times more likely to have medical debt than their white counterparts.
“The disproportionate impact of medical debt — with residents of color three times more likely to hold medical debt in D.C. — has a ripple effect on how it impacts the lives of our residents,” the mayor said. “Medical debt leads to damaged credit scores which can then prevent an individual from being able to buy a home, obtain a job, or go to college. By investing in buying down medical debt, we’re putting money back in people’s pockets and giving more people a fair shot. This is an investment in an equitable city and in better health, housing, and employment opportunities for residents.”
To qualify for debt cancellation, a resident must earn up to four times the federal poverty level or have medical debt that is at least five percent of their household income.
The debt will occur automatically and residents will be notified by mail of the cancelation.
Starting Friday, the Department of Health Care Finance will launch a Notice of Funding Amendment for third-party debt purchasers to buy down the $90 million in medical debt for the 90,000 affected residents. The third-party debt purchaser is expected to be notified in late April or early May if they are selected for the grant.
The selected grantee will then work with hospitals located in the city to forgive outstanding hospital debt that is more than 18 months delinquent for eligible residents.