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Cook County Erases $281m in Medical Debt

A year after its launch, a countywide medical debt relief program has wiped $281 million in medical debt for more than 158,000 residents.

The news, announced by Cook County Board President Toni Preckwinkle on Tuesday, Oct. 24, comes after a recent round of debt relief with the University of Chicago Medicine more than doubled the number of residents who saw their medical debt erased.

The Cook County Medical Debt Relief Initiative (MDRI), launched in 2022, is funded by $12 million from the American Rescue Plan Act. Working with the national nonprofit organization RIP Medical Debt, the program purchases medical debt from health care providers in the county at a discount, allowing the debt to be wiped for residents who meet financial hardship qualifications.

“We take great pride in what MDRI has achieved thus far, and this work underscores the profound impact of the American Rescue Plan Act, a transformative piece of legislation,” said Preckwinkle in a statement. “As we continue to leverage the funds provided by ARPA, we eagerly anticipate providing relief to thousands more of our Cook County residents who have been disproportionately burdened by the weight of medical debt.”

In the latest round of relief, the county purchased medical debt from the University of Chicago Medicine, erasing $173.7 million for 85,060 South Side residents. According to the county, the average UChicago Medicine debtor saw $2,043 in medical debt erased — more than 75% of these patients report annual household incomes lower than $51,000.

According to data from the county, the city’s South and West sides are disproportionately saddled with medical debt. Among the county’s list of zip codes struggling the most with this debt is 60637, an area which contains most of Woodlawn, as well as parts of Hyde Park, Washington Park and Greater Grand Crossing. According to county data, approximately 3,953 adults in this zip code have medical debt totaling $9,751,247. 

Nationwide, as of 2019, more than 100 million adults had medical debt totalling almost $200 billion. According to a 2022 poll by the Kaiser Family Foundation, Black adults are 50% more likely and Hispanic adults are 50% more likely than white adults to carry medical debt.

Research shows medical debt can lead to worse health and economic outcomes for communities. Per a 2021 Stanford study, researchers found that people with medical debt are less likely to seek medical care and that the debt – which is often sent to third-party collection agencies or paid for by credit card – can damage credit, making it more difficult for people to secure housing and employment.

To qualify for debt relief, recipients must live in Cook County and have a household income no higher than four times the current Federal Poverty Guidelines (FPG) – approximately $111,000 for a family of four – or have medical debt that is 5% or more of the debtor’s annual income. The program does not take applications, but rather automatically abolishes debt for eligible residents. Recipients will be notified by mail that their debt has been relieved and any negative credit marks and effects associated with medical debt have been removed.

Source : Hyde Park Herald