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NEW ORLEANS - City Council President Helena Moreno, in collaboration with Health Director Dr. Jennifer Avegno, is moving forward to clear an estimated $130M in medical debt for New Orleans.
The initiative is similar to one adopted in Illinois by Cook County and the City of Toledo in Ohio. Council President Moreno’s office has discussed these plans with the non-profit organization RIP Medical Debt, which coordinated medical debt relief initiatives with Cook County and Toledo.
Four out of ten Americans are experiencing the impacts of medical debt, which can lead to financial and psychological burdens, often deterring people from seeking the health care services they need. In some circumstances, financially vulnerable people with medical debt feel lasting impacts due to reduced credit scores, wage garnishment and property liens.
RIP Medical Debt works directly with medical providers to purchase qualified debt for pennies on the dollar of the debt’s face value. An estimated $1.3M will cover roughly $130M of New Orleans' medical debt. This week President Moreno will ask her fellow Councilmembers to set aside $1.3M in American Rescue Plan Act (ARPA) funds to cover the costs. Cook County utilized $12M in ARPA funds to work to clear $1B of estimated debt, and Toledo utilized $1.4M to cover an estimated $180M.
“This is a tremendous way to spend one-time federal dollars to help many New Orleanians needing assistance for financial stability,” said Council President Helena Moreno. “Being sick or injured shouldn’t put anyone in debt or lead them to go broke. Medical debt can happen to anyone, but the toll is especially high among Black adults. As we know, communities of color have also been disproportionately impacted financially and medically by COVID-19. I hope this can provide relief and a financial reset for many families needing this boost.”
“We are very excited by the City of New Orleans' enthusiasm -- and that of all local partners -- to tackle the persisting problem of medical debt,'' shares RIP President and CEO Allison Sesso. "We're committed to doing our due diligence to ensure our model is viable and set up for success in every area we work. We look forward to furthering conversations with local leaders and provider partners to determine what’s possible in New Orleans.”
“This initiative advances the City's Community Health Improvement Plan goals of improving access to health care and increasing economic stability for New Orleans residents," noted New Orleans Health Director Dr. Jennifer Avegno. "Data show that 21.3% of people in Louisiana have medical debt in collections, with an average amount of $824. About one in seven people with debt said they’ve been denied access to a hospital, doctor, or other providers because of unpaid bills. And what’s even more devastating is that many families must choose between paying off medical debt, buying food, or paying their bills.”
"The City Council’s initiative and creativity in using ARPA funds to eliminate medical debt will have a meaningful impact on the lives of many New Orleanians. Our community is vulnerable in many ways, including medical debt that is burdening folks on top of other rising costs – housing, utilities, transportation, etc. Seeking healthcare is not a luxury, getting excellent, life-saving healthcare is a necessity and a right. At LCMC Health, we’re really proud to see this type of innovative leadership from the City Council, led by Councilwoman Moreno," said Ayame Dinkler, CAO of LCMC Health.
The Council plans to move this process forward as quickly as possible. Next steps include coordinating with RIP Medical Debt, who will begin engaging local medical providers in an effort to access and clear eligible debt.
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