Proposal could potentially eliminate more than $200 million in medical debt
for 160,000 New Mexicans
Albuquerque, N.M. — Today, New Mexico House Democrats announced a proposal to relieve qualifying medical debt for New Mexicans, in partnership with Undue Medical Debt, a national 501(c)(3) nonprofit whose purpose is to strengthen communities by erasing financially burdensome medical debt.
“Every New Mexican deserves the chance to recover from an illness or injury without carrying the burden of unmanageable medical debt for years afterward,” said New Mexico House Speaker Javier Martínez (D-Albuquerque). “This proposal could bring relief to families, create financial breathing room for New Mexicans who are struggling, and remind people they are not on their own when hardship hits.”
Other states, including Arizona and Illinois, have eliminated billions of dollars of medical debt for millions of Americans in recent years through similar programs. House Democrats propose partnering with Undue Medical Debt to identify qualifying debt in large portfolios and purchase it from participating providers or debt holders for a fraction of its face value, using a very small percentage of state funds to provide enormous relief to families throughout New Mexico.
Eligibility for medical debt relief would be based on household income and the share of household income consumed by medical debt. Those who qualify for the program would have their past-due medical debt retired after their providers’ billing and collections processes have been completed. Qualifying New Mexicans would not have to apply to have specific bills erased, they would simply be notified that their debt is retired.
“Medical debt can follow someone long after an illness or injury, affecting their financial stability and limiting their options,” said Rep. Nathan Small (D-Las Cruces), who is the Chair of the House Appropriations and Finance Committee. “Other states have shown that a relatively small investment can deliver meaningful relief to families. A well-designed program can bring that relief to New Mexicans while also making careful use of public dollars.”
“No one should struggle to cover basic expenses because of a medical bill they can’t afford,” said Rep. Liz Thomson (D-Albuquerque), who is the Chair of the House Health and Human Services Committee. “New Mexico needs to explore more programs that give families meaningful relief now, while we also continue to address the broader challenges that make healthcare unaffordable.”
House Democrats are proposing a $2 million appropriation over three years, which could abolish more than $200 million in medical debt for an estimated 100,000 to 160,000 New Mexicans. The actual amount and timing of relief would depend on which qualifying debt portfolios providers make available.
“The medical debt crisis impacts an estimated 100 million people in the U.S., often creating a financial and emotional barrier to care, depressing credit scores and forcing families to make impossible decisions between keeping the lights on and treating a chronic condition or taking a child to the ER,” shares Undue Medical Debt VP of Government Initiatives, Courtney Werpy Story. “We’re grateful to Representatives Small and Thomson and Speaker Martínez for championing this pressing issue and we look forward to providing relief for those burdened by medical debt in New Mexico."
Medical debt is one of the biggest financial obstacles facing families in New Mexico and across the country:
Almost half of U.S. adults say they struggle to afford healthcare costs,
6 in 10 adults with healthcare debt say they have cut back spending on food, clothing, and basic household items*,
nearly half (48%) say they used all or most of their savings,
55% have deferred medical care as a result of medical debt,
and those with debt are three times more likely to struggle with depression and/or anxiety.
Crushing medical debt can lead to plummeting credit scores and even contribute to bankruptcy, home foreclosures, and evictions.
*See chart below for more information
Because medical debt relief would address existing debt without addressing the underlying costs that cause people to fall into debt, House Democrats will also continue working to make healthcare more affordable and accessible statewide by lowering costs for medical care and insurance, expanding treatment options, and recruiting and retaining more providers.
