Pittsburgh moving ahead with plan for medical debt relief

Pittsburgh officials are moving ahead with plans to alleviate medical debt for some city residents.

Councilman Bobby Wilson, D-North Side, introduced a measure last year that would use $1 million in federal American Rescue Plan Act dollars to contract with a company that will buy dischargeable health care debt from hospitals and forgive it.

The measure could forgive about $115 million in health care debt owed by about 24,000 city residents, Wilson has projected.

Initially, he suggested contracting with New York-based nonprofit RIP Medical Debt, a company that other cities partnered with on similar efforts to use covid relief funding to relieve medical debt for residents.

In January, however, council amended the bill so they could issue a request for proposals from any qualified company that may be able to partner with the city to discharge such debts.

After a months-long pause on the measure while city officials went through that process, legislation before City Council looks to partner with RIP Medical Debt, the same company Wilson initially proposed.

“I’m excited to see this bill come to the table where the city is going to go under contract with RIP Medical Debt to relieve Pittsburghers of their medical debt,” the councilman said.

In a letter to council members, Business Diversity Manager Chuck Durham said RIP Medical Debt was the only vendor willing to partner with the city.

According to the medical debt relief legislation, 7% of Allegheny County households have health care debt in collections, and more than 100 million Americans — or about 41% of adults — have health care debt. It’s the most common type of debt in the country and the leading cause of personal bankruptcy.

The legislation will allow the city and RIP Medical Debt to alleviate medical debt for residents who received health care on or after March 30, 2020. People whose debt is discharged through the program must have a household income of no more than three times the federal poverty level, and eligible account balances must be written off as bad debt.

Wilson said city officials’ calculations indicate that everyone who is eligible should see up to about $500,000 in medical debt relief. RIP Medical Debt will seek out residents whose debts apply, and qualified individuals don’t need to do anything to receive the help.

“One day someone wakes up and receives a letter saying they’ve been relieved of their medical debt,” he said.