| Photo by Jon Tyson on Unsplash
NEW YORK — In a bold move to tackle one of the most pressing financial burdens facing working-class families, New York City Mayor Eric Adams has announced the cancellation of nearly $135 million in medical debt for more than 75,000 residents. The initiative, part of a broader three-year plan to erase $2 billion in medical debt for up to 500,000 New Yorkers, marks the largest municipal medical debt relief program in the United States.
A Lifeline for Working-Class Families
“For too long, and for too many, medical debt has not only been a barrier for those looking to get the health care they need, but also a major financial and emotional stressor for families through no fault of their own,” said Adams in his announcement. “Working-class New Yorkers shouldn’t have to live in fear that getting sick will break their bank, and, thanks to our administration, they won’t have to”.
Medical debt is the leading cause of personal bankruptcy in the U.S., disproportionately affecting low-income, uninsured, and underinsured households. In New York City, where the cost of living continues to rise, this relief offers not just financial breathing room but a renewed sense of dignity and stability for thousands.
How the Program Works
The city partnered with Undue Medical Debt, a nonprofit based in Long Island City that specializes in purchasing bundled medical debt portfolios from hospitals and commercial debt buyers. These debts are then erased at pennies on the dollar, with no cost or tax penalty to recipients. Importantly, there is no application process—eligible New Yorkers are identified and notified directly.
To qualify, individuals must meet one of two criteria:
- Have a household income at or below 400% of the federal poverty line
- Hold medical debt equal to 5% or more of their annual income
- Beyond Debt Relief: Financial Empowerment
In tandem with the debt cancellation, Adams also celebrated the opening of eight new Financial Empowerment Centers located within NYC Health + Hospitals facilities. These centers offer free one-on-one financial counseling and coaching, helping residents manage money, reduce debt, build credit, and plan for long-term financial health.
“Improving our financial health can have direct impacts on our physical and mental health,” said Vilda Vera Mayuga, Commissioner of the Department of Consumer and Worker Protection (DCWP). “As a client of our Financial Empowerment Centers myself, I know firsthand how liberating it is to set yourself up for long-term financial success”.
The centers are part of a growing network of over 40 locations citywide, and have already helped New Yorkers reduce debt by $45.1 million and increase savings by $5.1 million since the start of the Adams administration
Real Stories, Real Impact
For many recipients, the relief has been life-changing. Efrain, one of the beneficiaries, expressed gratitude to Undue Medical Debt and Adams for “solving my medical debt and leading such a great program.” Another recipient, Hector R., shared that he initially thought the program was a scam, but was “overjoyed to find that it is totally real” and praised the initiative as a beacon of social and economic justice.
Deandrea Dey, who survived a traumatic car accident, said the cancellation of her medical debt allowed her to focus on recovery without the looming fear of financial ruin. “There is plenty more to this story,” she said, hinting at the emotional toll that debt can take on survivors of medical emergencies.
Looking Ahead
While the initial $135 million milestone is significant, the city still has a long way to go to reach its $2 billion goal by January 2028. The administration is actively raising additional funds to expand the program and include debts incurred at public hospitals, which are currently excluded from the relief effort.
Critics argue that debt cancellation alone doesn’t address the root causes of medical debt, such as high healthcare costs and insurance gaps. However, the Adams administration views this initiative as a critical step in its broader affordability agenda.
“This is about putting money back in people’s pockets and making our city more livable,” said a City Hall spokesperson. “We will not stop until we reach every New Yorker who needs this help”.
A Model for the Nation?
New York City joins a growing list of municipalities—including Cook County, Illinois and the state of North Carolina—that are using public funds to cancel medical debt. But with its scale and integration of financial counseling, NYC’s program may become a national model for how cities can address the intersection of health and financial equity.
As the program expands, it offers not just relief—but a roadmap for resilience.
