Council President Moreno Launches Initiative to Forgive New Orleanians’ Medical Debt

Photo credit Jonathan Cutrer | License

New Orleans City Council President Helena Moreno announced an initiative on Wednesday that would clear an estimated $130 million in New Orleanians’ medical debt. Moreno is collaborating with Health Director Dr. Jennifer Avegno to create the plan, which is similar to initiatives adopted in Cook County, Illinois, and the City of Toledo, OH earlier this year.

According to a press release, Moreno’s office has begun discussing the plan with RIP Medical Debt, a nonprofit group that worked on the Illinois and Ohio plans. Moreno plans to ask the New Orleans City Council to set aside $1.3 million from the $75 million received in American Rescue Plan Act (ARPA) funds to cover the costs of purchasing qualified medical debt for pennies on the dollar. That $1.3 million is estimated to cover around $130 million in residential medical debt.

“This is a tremendous way to spend one-time federal dollars to help many New Orleanians needing assistance for financial stability,” Moreno said. “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.”

In Orleans Parish, 69% of Black adults hold at least some medical debt in collections, with the average being around $719. According to Dr. Avegno, one in seven people in Louisiana with medical debt report they’ve been denied access to a hospital, doctor, or other providers because of unpaid medical bills. What’s more, many families feel they have to choose between necessities such as paying off medical debt or buying food and paying 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,” said Ayame Dinkler, CAO of LCMC Health. “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.”

Of course, discharging medical debt is also helpful to the hospitals and providers who hold that debt.

Although the Council plans to move as quickly as possible, it could still take several weeks or months before the initiative is finalized. The next steps include continuing to coordinate with RIP Medical Debt on working out the details of who will qualify for medical debt forgiveness, and helping the company engage with local medical providers to access and clear that debt.

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