Mayor Muriel Bowser has announced a commitment to fund the cancellation of medical debt held by District of Columbia residents.
The initial investment of $900,000 by DC is expected to allow as much as $90 million in medical debt held by DC residents to be canceled—both ending the patients’ obligation and leading to its removal from their credit reports. With this innovative investment that leverages a modest amount of public funds to accomplish a great deal of social good, DC will become the first state-level government in the nation to use public dollars to cancel medical debt.
Tzedek DC Founding President and Director-Counsel Ariel Levinson-Waldman applauded the move: “Mayor Bowser’s commitment to canceling medical debt is a commendable step towards racial and health equity in DC. With local budgets tightening here and around the country, purchasing and eliminating residents’ debt is a cost-effective and immediate way to end one of the most common poverty traps afflicting our neighbors.”
The Mayor’s decision follows recent testimony by Tzedek DC to the DC Council highlighting medical debt and, along with allied organizations, urging swift action to improve the lives of some of the District’s most vulnerable residents. Tzedek DC’s testimony is available here.
Estimates suggest that more than 90,000 District residents may have outstanding medical debt, with more than 40,000 residents facing a medical debt in active collections. As in the rest of the country, the burden of this medical debt falls disproportionately on residents who are Black or persons of color, who are three times more likely to hold medical debt than white DC residents.
Medical debt is a key driver of overall health, specifically impacting mental health, physical health, financial stability, and health equity. Those with medical debt often forgo further medical care for fear of the expense. Medical debt also negatively impacts residents’ credit. As Mayor Bowser has said, “We know that by addressing the social determinants of health, we can attack disparities in health outcomes, empower families, and transform communities.”
In a recent fact sheet, the White House uplifted the several municipal and county governments that have embraced this strategy to relieve medical debt.
About Tzedek DC, Our Medical Debt Work, and the Health Equity Fund
Tzedek DC’s name is drawn from the ancient Jewish teaching “Tzedek, tzedek tirdof,” or “Justice, justice you shall pursue.” Headquartered at the University of the District of Columbia David A. Clarke School of Law, Tzedek DC’s mission is to safeguard the legal rights and financial health of DC residents with lower incomes facing the often-devastating consequences of debt collection and credit-related obstacles, including those arising from medical debt. This mission is carried out as anti-racism work in response to the massive wealth gaps tracking race in DC and nationwide. Tzedek DC seeks to serve and empower its client base, which is comprised of 90% Black residents, 60% women, and 25% disabled community members. Our strategic approach combines three synergistic activities: (i) free direct services—legal representation and advice, and financial counseling; (ii) working in coalition to make systemic change; and (iii) providing bilingual community legal education on debt collection, identity theft, and credit management. Since 2017, Tzedek DC has served over 3,000 client households in legal matters and catalyzed systemic reforms benefiting hundreds of thousands of DC residents.
A portion of Tzedek DC’s medical debt work is funded by the Health Equity Fund, as administered by the Greater Washington Community Foundation in partnership with the Health Equity Committee. The Health Equity Fund is designated to improve the health outcomes and health equity of residents of the District of Columbia. The historic fund is one of the largest philanthropic funds of any kind focused on community-based nonprofits that serve District residents. Given that 80 percent of DC’s health outcomes are driven by social, economic, and other factors, compared to just 20 percent by clinical care, the Health Equity Fund adopts an economic mobility frame to address the root causes of health inequity and advances a sustainable network of people, organizations, and projects to ensure equitable health outcomes for Black, Brown, Indigenous, People of Color and other marginalized populations in DC.
We are especially grateful to the Health Equity Fund for the support and shared vision of health equity and racial and economic justice.