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Governments target medical debt through Covid relief funds

By 02/16/2023 11:23 AMFebruary 26th, 2023No CommentsBy YidInfo Staff

Every day, millions of Americans with mounting medical debt must choose between paying the bill and buying groceries, rent, and utilities. Some people could even forgo vital medical care out of fear of accruing more debt.

More municipal, county, and state governments are coming up with proposals to use federal coronavirus pandemic relief monies to pay off individuals’ medical debt and lessen their debt loads to solve the issue.

According to Willie Burnley Jr., one of the city councilors driving the initiative, the Somerville City Council last month unanimously approved a resolution to spend $200,000 of the city’s $77 million in American Rescue Plan Act cash that may pay off as much as $4.3 million in medical debt. up to 5,000 of the city’s 80,000 residents could benefit.

More than a dozen towns, including Cook County, Illinois, which contains Chicago, Pittsburgh, New Orleans, and Toledo, Ohio, have already implemented or are considering doing so. Ned Lamont, the Democratic governor of Connecticut, suggested using $20 million in ARPA funding to pay down as much as $2 billion in medical debt for citizens of the state.

According to campaigners, medical debt, in contrast to credit card or loan debt, cannot be avoided.

According to Burnley, people can’t avoid medical debt, and it’s not their fault. “Nobody chooses to get injured or ill.”

Virginia Faust, a resident of Somerville, had health insurance, but in 2021, when a mental health emergency necessitated a week-long hospital stay, she nevertheless accrued several thousand dollars in debt.

In a cruel irony, the obligation affected her credit and put additional stress on her mental health.

Faust, 25, said of Burnley’s proposal: “This would have a real impact on my life and eliminate a lot of tension.” It would imply that I would be more inclined to visit a doctor and receive routine checkups.

According to Ohio state representative Michele Grim, who spearheaded the initiative while serving as a Toledo city councilor, a combined $1.6 million from the city and Lucas County will remove up to $240 million in medical debt for as many as 41,000 citizens in Toledo.

She said, “It’s such a fantastic return on investment.” “I honestly couldn’t think of a better way to use money intended to help our citizens’ economies recover.”

The cities and states are working with RIP Medical Debt, a nonprofit organization with headquarters in New York, to pay off massive bundles of debt acquired from hospitals and other healthcare providers using donations since 2014. $100 in debt is typically erased for every dollar contributed.

According to Allison Sesso, president and chief executive officer of the charity, more than 40% of American adults have medical debt, and roughly two-thirds of personal bankruptcies nationwide include medical debt as a significant contributing factor.

The $1.9 trillion American Rescue Plan Act, which contained $360 billion for local, state, territory, and tribal governments to give economic relief, is where the money comes from.



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