Thousands of people in Somerville, Massachusetts, could have millions of dollars in medical debt paid off if the city chooses to move forward with a proposal to buy their debt.
An ordinance proposed by City Councilor Willie Burnley Jr. would allocate $200,000 of American Rescue Plan Act funds toward a partnership with RIP Medical Debt, a national non-profit that would purchase the medical debt of approximately 5,000 low-income households.
With the average medical debt per Massachusetts resident over $900, he estimates this could wipe out more than $4 million in debt.
“What surprised me most about it was how cheap it is, quite frankly to acquire medical debt and how easy it is to relieve it,” said Burnley. “Working with RIP Medical Debt, they say that for every dollar of money they have, they can relieve $100 worth of medical debt.”
“We buy directly from hospitals as well as from the secondary market and we are able to leverage that kind of return on investment because unfortunately, medical debt is really cheap,” explained RIP Medical Debt CEO Allison Sesso. “We get our hands on this debt, unlike for-profit debt buyers, because we're charitable and mission driven, we get rid of the debt.”
This kind of initiative gives Virginia Faust hope.
“In 2021, I experienced a mental health crisis. And I went to the emergency room.”
She said that hospital visit and transport in an ambulance were costly.
“I started getting these bills in the mail for large amounts of money,” said Faust. “I avoid going to the doctor because I know I can't afford it. And I know that any copay I have will just continue to add to my already existing medical debt. It's affected my credit score.”
The ordinance was approved by the Somerville city council in January and is now being considered by the mayor.
“For me at the heart of this matter is, is healthcare a human right or is it not? Because if it's a human right then it shouldn't be a death sentence to pay the bills for your medical procedures,” said Burnley. “This, I think is an incredibly bold step that our city can be taking, but it's not enough.”
A 2022 Kaiser Family Foundation survey found 100 million Americans were living with medical debt. Twelve percent of those folks owed more than $10,000.
“I want people to not feel the stigma that's associated with having medical debt that people really feel and understand that this is not a personal failing that this really is an unfortunately, a systemic problem,” said Sesso. “We need bigger solutions even beyond what RIP is doing.”
