(Washington, DC) – This week, as she rolled out her Fiscal Year 2024 Fair Shot Budget, Mayor Muriel Bowser announced that the District will cancel up to $90 million in medical debt for many of the 90,000 District residents who have unpaid medical bills. The initiative 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.
“The disproportionate impact of medical debt – with residents of color three times more likely to hold medical debt in DC – 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 people from seeking future care, medical debt can also lead to damaged credit scores which can have far-reaching effects on a person’s life – hampering an individual’s ability to buy a home, obtain a job, or go to college. In Washington, DC, residents of color are three times more likely to hold medical debt.
For a resident to be eligible for medical debt cancellation 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 occur automatically and residents will be notified by mail of the cancelation.
“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.”
Staring on March 31, DHCF will launch a Notice of Funding Announcement for third-party debt purchasers to buy down the $90 million in medical debt for the 90,000 District 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 District to forgive outstanding hospital debt that is more than 18 months delinquent for eligible District residents.
Learn more about Mayor Bowser’s FY24 Budget at budget.dc.gov.