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Shapiro touts $4M plan to wipe out medical debt

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(The Center Square) – Erasure of $4 million in medical debt for thousands of residents could be done without them even knowing until after the fact, according to a plan by Pennsylvania Gov. Josh Shapiro.

“Erasing medical debt is a practical, commonsense way that we can deliver real relief for folks all across Pennsylvania,” Shapiro said during a visit to Lewistown Community Health Center on Tuesday.

The governor wants the state to hire a private vendor $400 million worth of debt for residents living at-or-below 400% of the federal poverty level – or up to $60,240 for a single person and $124,800 for a family of four.

Obligations totaling 5% or more of a person’s income would also qualify under the program.

“My budget helps those who are being crushed by medical debt with a $4 million investment that we can use to erase nearly a quarter of all medical debt relief for Pennsylvanians,” Shapiro said.

There’d be no application process either. The vendor itself would inform residents that their debts have been erased.

The administration said that as of October, 11% of residents carry medical debt totaling $1.8 billion. Rural counties struggle the most, according to state data.

In February, lawmakers rallied in Harrisburg in support of the plan. Legislation pending in the Senate, House Bill 78, would give the state authority to buy the outstanding balances for 1 cent on the dollar – the same way debt collection companies do.

The bill’s prime sponsor, Rep. Arvind Venkat, D-Pittsburgh, an emergency room physician, has seen this kind of program work. In Pittsburgh, the City Council was able to eliminate $115 million in debt for more than 24,000 residents with a $1 million investment.

“Medical debt is a burden on thousands of Pennsylvanians and raises health care costs for everyone in our state,” Venkat said Tuesday. “As an emergency physician, I have seen patients who died from delaying care due to their fear of the medical debt they had and might further accrue.”