More than 1 in 5 Louisianans are living under the burden of medical debt, the result either of being uninsured or facing out-of-pocket bills that insurance doesn’t cover.
For many, this can be a crushing situation that wears on their minds, limits their ability to pay for the things they need and leaves them reluctant to seek additional care, which itself can compound health and financial challenges.
So we’re pleased to see several new initiatives aim to relieve that burden for thousands of people in our state.
Partnering with the national nonprofit Undue Medical Debt and Ochsner Health, the city of New Orleans is using $1.3 million of pandemic relief money to forgive about $59 million in doctor, hospital and other medical bills owed by 66,000 New Orleanians.
“This is a really big deal,” said City Council President Helena Moreno, who has been working on the initiative for several years. “We have people in our community carrying hundreds of thousands of dollars of medical debt through no fault of their own?— because they got sick or were in a horrible accident. It only made sense to help them out.”
Here's how it will work. Undue Medical Debit will buy the debt from Ochsner at about a penny on the dollar, and then rather than seek to collect, forgive it. The debt relief is available to people who have medical debts that are 5% or more than their annual income or who are at or below four times the federal poverty level.
Daniel Lempert, vice president of marketing and communication for the organization, said following this formula is “how we ensure we are helping those who are least able to pay.”
The city is also in talks with the other major hospital system in town, LCMC Health, to offer the same relief to its debtors.
And shortly after its deal with New Orleans was announced, Ochsner confirmed that it was launching a similar program statewide with Undue Medical Debt. It is wiping out medical debts of roughly 193,000 patients across the region who owe a collective $366 million, using a combination of pandemic money, grassroots fundraising and private donations.
Some industry experts have said such debt-relief initiatives are not that significant as a practical matter, as hospitals have little expectation of collecting old debt in the first place. A penny on the dollar isn’t much, but it may be more than these institutions would get otherwise.
But for the families affected, the relief offered by these programs can offer nothing short of a clean bill of financial health.