Pittsburgh could soon launch a program to alleviate the medical debt of some residents. City Council is expected to pass a measure Tuesday to hire a company to buy up and discharge an estimated $115 million in health care bills.
When the proposal was first introduced by Councilor Bobby Wilson last month, it set out to spend $1 million in federal aid money through New York-based RIP Medical Debt. But after some concerns raised by other members, Wilson amended the measure last week to allow officials to survey qualified companies and choose a partner later.
“There’s too much at stake here to relieve medical debt for individuals in Pittsburgh for anything to get in the way of this being done the correct way,” Wilson said last week.
According to Allegheny County data, 7% of all households have health care debt in collections. That number jumps to 9% among households in communities of color.
The original proposal stipulated that people who benefit from it could have a household income of up to four times the federal poverty limit. But Wilson tightened that requirement last week, based on the city’s law department recommendation to ensure the program followed federal guidelines. The current proposal is set to apply to those with an income of no more than three times the poverty level.
The program will buy medical debt — for pennies on the dollar — from hospitals directly, so residents would not need to apply for the program. The debt must stem from medical care received on or after March 30, 2020 and the account must be considered dormant by hospitals.
Pittsburgh’s plan would mirror similar programs in Cook County, Illinois — which includes Chicago — and Toledo, Ohio where local governments partnered with RIP Medical Debt using federal coronavirus aid. Cook County allocated $12 million in federal money, with plans to forgive as much as $1 billion in debt. Toledo announced in November it will grant RIP Medical Debt $1.6 million to forgive up to $240 million.
But Pittsburgh could choose to work with a different vendor.
City Council Solicitor Dan Friedson explained last week that while Pittsburgh could ultimately choose to hire RIP Medical Debt, the bill “is written in such a way that anybody who is in the business of discharging health care debt can respond to this.”
RIP Medical Debt has already bought up debt from hospitals in the Pittsburgh region. The nonprofit worked with churches in Mt. Lebanon, Peters Township and Canonsburg last year to forgive $5 million in medical debt.
While Wilson’s plan appears to have enough support to pass, some council members have raised concerns about how to fund the program, and whether the city should buy medical debt from medical providers like UPMC.
Council President Theresa Kail-Smith registered the sole vote in opposition to moving the plan forward last week. She questioned whether erasing medical debt was the responsibility of city government.
Members discussed the measure at length last month during the city’s budget hearings. The city took $1 million funded the medical debt program with money originally earmarked for an LED streetlight project. Councilor Bruce Kraus strongly opposed pulling funding for streetlights, calling it a “betrayal” of his constituents who had been asking for street safety improvements.
Kraus voted to move the plan to find a company forward last week, but said his “position has not changed” about the program overall. He said he plans to vote against launching the program.
He will likely get that opportunity. Should Wilson’s bill pass Tuesday, the city will then launch a bidding process to hire a medical debt collector. The final contract would require council approval before the program could launch.
