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Denver City Council members propose medical debt forgiveness plan

At least two council members sent a letter to Denver Mayor Mike Johnston asking him to allocate funding toward medical debt relief in the city budget
medical debt
Posted at 4:19 PM, Aug 24, 2023

DENVER – Two Denver City Council members are putting forth a plan that would pay off medical debt for Denver residents.

Denver City Councilwoman Sarah Parady and City Councilwoman Shontel Lewis created a proposal that involves working with the nonprofit RIP Medical Debt to buy debt from private lenders for pennies on the dollar then forgive the debt holder.

“About a third of people experiencing homelessness say that medical debt was a contributing factor,” Parady said. “For me, it goes back to my time as a legal aid attorney. I represented people in foreclosure, and many of them had medical debt, the unit that I worked in did a lot of work to help people get out of medical debt collection. So, you know, discharge that debt and bankruptcy, restructure it, come up with power plans. And so I remember back at that time, really noticing the impact on families. You would just get blown out of the water by a medical crisis, people would end up in foreclosure and so on."

Councilwoman Lewis said medical debt was a top priority for her as well during her first term on city council.

“We may not be able to increase the amount of money that's going into households, but where can we decrease expenses? And I think medical debt is one way to do that. Also, it's in line with thinking about preventative measures to keeping folks from being unhoused,” Lewis said.

Denver City Council members propose medical debt forgiveness plan

Parady and Lewis started talking to RIP Medical Debt about how to relieve debt at the city level.

“The City of Toledo, Ohio, did this recently with ARPA (American Rescue Plan Act) funds, Cook County in Illinois… RIP Medical Debt did a little back-of-the-envelope for us and said that there's probably about $280 to $300 million of medical debt and collections in the city. Here in Denver, the idea would be for the city to spend about $3 million. Not a huge budgetary item in the scope of the city budget and buy, purchase and forgive all of that debt,” Parady said.

Parady and Lewis sent a letter to Denver Mayor Mike Johnston asking him to allocate funding toward medical debt relief in the city budget.

“It's really up to the mayor to determine if he would like to include this in his budget priorities. If he includes it, great, we celebrate. And if not, I think we figure out a game plan and be able to maybe have that as a part of the budget with council members,” Lewis said.

Lewis and Parady said the majority of their fellow council members are supportive of the proposal.

Johnston will release budget details in late September.


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