State Governments Use COVID-19 Relief Funds to Assist Residents’ Growing Medical Debt

Often, Americans are forced to make difficult decisions between paying for life necessities or clearing up debt.

Due to the fear of digging a deeper debt hole, some people will put their own health at risk, which can cause a bigger problem. The Associated Press reported how the governments in certain cities are using a new tactic to assist – a plan to spend federal COVID-19 funds to eliminate residents’ medical debt and ease debt worries.

Cities such as Boston, Chicago, Pittsburgh, New Orleans, and others are taking advantage of this plan, which has been proven to work. Last month, the city council in Somerville, a suburb outside of Boston, unanimously agreed to spend $200,000 of the city’s $77 million in American Rescue Plan Act funding to clear up close to $4.3 million in medical debt. According to AP, 5,000 of the city’s 80,000 residents will benefit.

“Medical debt is something that people can’t help and it’s not their fault,” city council member Willie Burnley said. “No one chooses to get hurt or to get sick.”

The spending plans are looking to eliminate $1.5 million in medical debt and come right on time. On Tuesday, MarketWatch reported COVID-19 cases are continuing to decline, going down 13% in two weeks. Coronavirus-related hospitalizations are down 11%, and the average number of virus related deaths dropped to 428, a 13% decrease.

In Toledo, OH, a reported $1.6 million from the city and Lucas County will eliminate close to $240 million in medical debt for almost 41,000 residents.

Ohio state Rep. Michele Grim told AP that this plan is a better way to spend federal money. “It’s such a great return on investment,” Grim said. “I really couldn’t think of a better way to use dollars that were meant to aid in the economic recovery of our citizens.”

It can definitely help turn people’s lives around. Virginia Faust, a 25-year-old Somerville resident, had health insurance, however, after a medical emergency, she fell several thousand dollars into debt in 2021.