SAINT PAUL, Minn — When St. Paul Mayor Melvin Carter delivered his budget address, ears perked up when he mentioned a plan to relieve medical debt.
"I am proposing a one-time, $1 million investment of American Rescue Plan Funds to purchase and completely eliminate all of it," he said during his address in August.
The St. Paul City Council's budget committee learned more about how the mayor's plan will work on Wednesday.
Muneer Karcher-Ramos, the director of the Office of Financial Empowerment, said the $1.1 million in pandemic relief money can be used to relieve $110 million in debt for about 43,000 Saint Paul residents.
"This is using the sort-of proven return on investment strategy by RIP Medical Debt 100 to one return on investment. So for every $1 invested, $100 in medical debt is relieved," said Karcher-Ramos.
RIP Medical Debt is the program facilitator who says it's a win-win because oftentimes this debt doesn't get paid.
"Even though their medical bills are not on a credit report, or not involved in active collections, are not the subject of lawsuits, they still fret over those debts," said Keith Hearle, special advisor and coordinator for RIP Medical Debt. "They do affect behavior in terms of willingness to go back and get the health services that they need."
To qualify, residents would need to be under four times the federal poverty guideline or have medical debt 5 percent or higher of their annual household income.
The City Council would eventually have to approve this and other budget items.
"I am not sure how this is going to have a return or systemic impact beyond just being really nice for the people who benefit from it in the moment," said Council Member Rebecca Noecker.
"To utilize 1 million of American Rescue Plan dollars, which was initiated because of a medical catastrophe with the pandemic, seems like a very good use of one-time dollars," said Council Member Chris Tolbert.
RIP Medical Debt is a nonprofit that's currently carrying out similar programs in dozens of other jurisdictions.
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