$42 million in medical debt erased for more than 62,000 DC residents

$42 million in medical debt erased for thousands of DC residents

More than 62,000 D.C. residents will be getting their medical debt erased. FOX 5's Homa Bash has all the details.

WASHINGTON - More than 62,000 D.C. residents will be getting their medical debt erased.

The nonprofit organization Tzedek DC recommended and advocated for the relief. The organization focuses on safeguarding the debt-related legal rights and financial health of people with lower incomes, and applauds the cancellation of about $42 million of medical debt for more than 62,000 District of Columbia residents.

The relief is due to a public dollar investment by the D.C. Government through an initiative from Mayor Bowser. This investment has made D.C. the first state-level government to invest in the large-scale purchase and cancellation of medical debt. Over 80 percent of residents benefiting from the cancellation live in zip codes that are majority Black or community members of color.

According to officials, residents whose medical debt has been erased will receive a letter from Undue Medical Debt, a national nonprofit that acquires medical debt in bulk from providers like hospitals and then erases it. Tzedek DC will be providing free services to support residents with questions related to this relief, including how it relates to their credit report.

"This is a big win for D.C. residents. We applaud Mayor Muriel Bowser and Deputy Mayor Wayne Turnage for this choice to invest in large-scale medical debt cancellation as an anti-poverty strategy and in response to the health equity problems that medical debt presents and perpetuates," said Ariel Levinson-Waldman, Tzedek DC’s Founding Director. "We also deeply appreciate the systemic relief work of Undue Medical Debt. We urge residents to open envelopes coming to them from Undue Medical Debt so they know that their medical debt has been canceled and can take steps to ensure their credit report reflects that fact."

Waldman-Levinson also told FOX 5 that according to data, Black residents are burdened by medical debt at a 3 to 1 ratio compared to White residents.

"So this is a step toward, not a complete solution, but a positive step toward addressing health equity," he added.

The letters will be sent out starting Friday, August 30th, and received by eligible residents over the next few weeks. If you get a letter in the mail from Undue Medical Debt - please be sure to open it.

Tens of thousands of DC residents medical debt erased

A new initiative launched by D.C. Mayor Bowser will help wipe out about $42 million of medical debt for more than 62,000 District of Columbia residents.

D.C. Director of the Office of Budget and Performance Management Jennifer Reed said this has been about 18 months in the making and called it a transformational investment.

"For a lot of people medical debt is the leading cause of bankruptcy – particularly for Black and Latino residents -- so we are thrilled to wipe this off the books," Reed said. "It will also get taken off their credit reports and it should just make it easier as they're applying for jobs, or looking for homes, apartments, cars. Anything you need that credit check for."

Reed said D.C. has a budget of $20 billion, so this $223,000 investment to clear millions in debt is not much in the grand scheme of things.

Tzedek is offering people who qualify for the debt relief FREE access to financial advisors and attorneys to understand the benefits and next steps. You can learn more here: https://www.tzedekdc.org/

An example of that letter can be viewed below: