New Orleans Takes Aim at Eliminating Millions in Medical Debt

By Consumers for Quality Care, on June 14, 2023

New Orleans has joined forces with RIP Medical Debt, a nonprofit organization, to forgive the medical debts of tens of thousands of city residents, Axios reports.

For many, medical debt increases stress, wreaks havoc on their credit scores, causes them to delay necessary medical care, and can – and too often does – force them to file for bankruptcy. Now, this burden has been lifted for about 80,000 New Orleans residents.

Led by Mayor LaToya Cantrell, the program will use $1.3 million in federal funds from the American Rescue Plan Act (ACTA) to purchase medical debt and then notify the consumer carrying the debt that their debts have been forgiven. Because the debt can be purchased for pennies on the dollar, it is estimated that this $1.3 million program, executed in partnership with RIP Medical Debt, will result in about $130 million of medical debt being forgiven.

Debt forgiveness programs like this have already benefitted consumers in Cleveland; Cook County, Illinois; and Washington, D.C.

CQC applauds efforts that aim to address and alleviate the medical debt crisis for consumers and also urges lawmakers and the Biden administration to enact policies that will protect consumers from crushing medical debt.