The pandemic crisis due to COVID-19 shook the whole nation. Every day, many Americans with medical debt face difficulties in making financial decisions. Paying for the rent, groceries, and utilities has become a challenge. Many people even avoid necessary health care out of fear of incurring additional debt. The live breaking news today states county, municipal, and state governments devised plans to address this situation. These strategies focused on the spending that people made during the Coronavirus pandemic in the form of relief funds. It would eliminate medical debts and ease the debt burden.
A new resolution in the American Rescue Plan Act
Somerville’s city council has passed a unanimous resolution for American Rescue Plan Act funding. Out of the city’s $77 million, $200,000 will be used for paying. This includes the $4.3 million in medical debt. 80,000 residents could benefit from this funding.
Different communities in Illinois, Cook County, Pittsburgh, Toledo, Ohio, and Chicago have passed the motion with similar plans. Ned Lamont, a Democratic Connecticut governor, has also proposed spending the funds so $2 billion in state residents’ medical debts can be eliminated.
Medical debt is not a choice, unlike loans or credit cards. It is something that people have to take as a survival measure. No one wants to get sick or hurt, but the increased healthcare expenses have made it challenging to pay off the amount from regular monthly payments.
Some residents of Somerville have health insurance. Despite the insurance, they need to pay thousands of dollars due to a mental health emergency in 2021. Few people had to be admitted to the hospital for a week, which was needed. The debt also affected the credit score. This has put them under more stress. The residents are facing issues to pay off the debt, but with the government’s funding support, they can now get relief from such stress.
Michele Grim, a Toledo city councilor, devised a plan to combine $1.6 million from the city while eliminating $240 million in medical debt. This has given more than 41,000 residents a sigh of relief. It is also a great investment strategy where dollars can be wisely spent. It also aids in the economic recovery of citizens.
Dealing with medical debt
Some states and cities are now teaming up with a New York-based non-profit organization named RIP Medical Debt. It uses donations to purchase a huge bundle of debt from hospitals and healthcare providers on the cheap and then pay it off. A single dollar donation can relieve $100 of debt. Currently, nearly 40% of American adults are in debt due to medical expenses. Nearly two-thirds of the personal bankruptcies in the country are because of medical debt. With the American Rescue Plan Act, the government is aiming to offer economic relief.
With this live breaking news today, at least people can know about the government’s approach and seek relief. However, the eligibility requirements can vary. People who wish to be eligible for debt relief in Somerville through RIP Medical Debt should show household income proof of up to 400% of the federal poverty level, which is $111,000 annually for a family of four. The RIP Medical Debt Program also accepts citizens with medical debt exceeding 5% of their annual income.
