Art by Aidan Chang

On January 12, Somerville City Council unanimously passed a resolution to spend a portion of the city’s American Rescue Plan Act funding to alleviate medical debt for Somerville residents. The effort began as a result of increased medical expenses related to the COVID-19 pandemic, which has only intensified the already existing medical debt crisis in the US. 

The city of Somerville is partnering with RIP Medical Debt, a national nonprofit that was launched in July 2014. Founded by two former collection industry executives, the organization claims to have relieved over $8.5 billion in medical debt for over 5.5 million families. RIP Medical Debt buys bundles of medical debt from hospitals and health care providers, which allows them to alleviate “millions of dollars [of debt] at a fraction of the original cost,” according to the organization. This means the allocated funds will address “100x its value in medical debt.”

To be eligible for debt cancellation with RIP, Somerville residents must have household incomes less than four times the federal poverty level or have medical debts that exceed 5 percent of their annual income. It is not necessary to apply for the program. RIP notifies beneficiaries via a letter that their debts have been acquired and canceled.

The Somerville resolution commits $200,000 of the $77 million allocated to the city from the ARPA budget to medical debt payoff. According to Willie Burley Jr., a Somerville committee member instrumental in the resolution’s passing, this would ideally alleviate as much as $4.3 million in medical debt for Somerville residents. 

Somerville’s commitment to debt alleviation is indicative of the city’s historical commitment to progressive policy. Mark Lannigan, a Tufts senior and Massachusetts Democratic State Committee member, highlighted the Somerville government’s track record of leading on national issues. “Somerville has always been a city that has stepped up to the forefront of progressive issues,” Lannigan said. “They’ve always kind of been on the cutting edge of taking on big fights before they were even taken on as national fights. My hope is that this is the first step into getting a full medical relief forgiveness plan out at the federal level.”

Politicians in various local governments are attempting to address the problem of medical debt through a similar allocation of ARPA funds. Ohio’s Toledo City Council approved a plan in November 2022 to apply $1.6 million of ARPA funds to cancel medical debt. Similarly, the government of Cook County, Illinois, instituted a three-year, $12 million project with the same expressed goal.

This concern has also been shared on the federal level. Most recently, the Biden administration announced a series of actions to lessen the burden of medical debt in April 2022. Proposed solutions to relieving this burden include eliminating medical debt as a factor in credit scores, completely forgiving medical debt for veterans, and having the Consumer Financial Protection Bureau increase their education tools aimed at navigating the medical billing landscape. 

Tufts Professor Amy Lischko, who currently serves as the Massachusetts director of health care policy, highlighted the importance of educational resources for American consumers when addressing medical debt. “Some of [the solutions] are at the policy level, and some are maybe educating people about the type of health insurance that’s best for them, and then how to use the health insurance that they do have.”

Medical debt impacts 23 million people throughout the US, a number that equals  approximately one in 10 adults. In 2022, the Census Bureau released the Survey of Income and Program Participation. According to the report, people in the US owe a combined $195 billion in medical debt, making medical expenses the largest source of debt in the country. Across the board, racial minorities and those without medical insurance are more likely to be affected, deepening existing racial and social disparities. 

Yet few Americans are free from the potential of acquiring medical debt. Lischko outlined the pitfalls of the American insurance system. “In the past decade or so we’ve been seeing an increase in what we call under-insurance, so even people who have insurance have larger deductibles. Now they have to pay a larger percentage of their health care bills,” Lischko said. “In addition, sometimes there are services and medications that aren’t covered by their insurance plans, so people end up with debt.”

In the face of the current dearth of federal policies aimed at the eradication of medical debt, the directing of ARPA funds towards the issue stands as a significant solution. However, there remain crucial criticisms of the proposed resolution—most notably its one-time nature.

Lannigan connected the conversation of the singular nature of the resolution to Tufts’ relationship with its host community of Somerville. “Tufts as an institution should be giving back more to our communities, [and] a very tangible way that [Tufts] could be doing a lot more is paying more in taxes,” he said. “This can help make up for some of the money that is going to disappear when funds from these federal programs disappear. A lot of the people that I have been working with at the state and local level have recently been looking at how to use [ARPA funds] in ways where we don’t become reliant on it.” 

These one-time solutions are additionally problematic as they fail to address the systemic roots of medical debt. Allison Sesso, RIP’s CEO, highlighted the faults of solely focusing on relieving debt as opposed to eradicating the reasons individuals acquire debt in the first place. 

“I don’t think [RIP] is a solution to this problem long term. I think [RIP] is an important resolution for those individuals that are impacted today,” Sesso said in an interview with the A Second Opinion Podcast. “[But] I don’t want to lose sight of the fact that everyone [RIP] helps today, it’s improving their lives… [RIP’s work] is an important support and I can provide it for a low cost and relatively easily.” 

Lischko echoed a similar sentiment. “You can always criticize those kinds of policies that aren’t getting at the root cause. But it’s a difficult problem as it involves policies that are more difficult to get passed. I think that [alleviating medical debt] is an innovative way of using ARPA funds… You’re not really addressing the root problem, but it does still bring relief to the families that do have medical debt,” she said.

The resolution is currently awaiting approval from the office of Somerville Mayor Katjana Ballantyne. If passed, Somerville would be one of the first in a line of municipalities working to relieve medical debt across the country. 

Lannigan retains high hopes for the future of the proposed legislation. “[The resolution] has really gotten a lot of support,” he said. “There’s been a lot of conversation about medical debt in the state [and] in the nation… I have my fingers crossed.”