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Mayor Bowser to cancel $90 million in medical debt for DC residents

In Washington, D.C., officials say residents of color are three times as likely to have medical debt.

WASHINGTON — More than 90,000 D.C. residents could receive some much-needed relief on their medical bills thanks to a new initiative by Mayor Muriel Bowser.

Editor's Note: The above video aired on March 22, 2023.

This week, while Mayor Bowser rolled out her Fiscal Year 2024 Fair Shot Budget, she announced that the District will cancel up to $90 million in medical debt for as many as 90,000 residents who have unpaid medical bills.

The initiative, funded by anticipated surplus funds from the Fiscal Year 2023 budget, will help to address health inequities and racial disparities related to medical care. 

“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. 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,” said Mayor Bowser. “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 a more equitable city and in better health, housing, and employment opportunities for our residents.”

In addition to preventing residents from seeking further care, officials say medical debt can also lead to damaged credit scores. These bad credit scores can have far-reaching effects on a person's life including making it harder for them to buy a home, get a job, or go to college.

In D.C., residents of color are three times as likely to have medical debt, according to a news release.

For a resident to be eligible for medical debt cancellation, officials say they must be earning up to four times the federal poverty level or have medical debt that is at least 5% of their household income.

The medical debt cancellation will happen automatically and residents will be told via mail of the cancellation.

“We know that health disparities have existed long before the COVID-19 pandemic, but the pandemic exacerbated the inequities that have existed for too long,” said Wayne Turnage, the Director of DHCF. “We also know that people paused their preventative medical procedures during the pandemic, but that prevention is the foundation to a healthy person and healthy city. We want all residents to have a fair shot at controlling their health and believe that cancelling their medical debt will help achieve that goal.” 

Starting March 31, the Department of Health Care Finance will launch a Notice of Funding Announcement for third-party debt purchasers to buy down the $90 million in medical debt.

Officials claim 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 District to forgive outstanding hospital debt that is more than 18 months delinquent for eligible District residents.

For more information on Mayor Bowser's 2024 Fiscal year Budget click here.



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