St. Paul council vote wipes away medical debt for thousands of residents

ST. PAUL, Minn. (FOX 9) - An estimated 43,000 people in St. Paul won't be weighed down by medical debt after the council passed its city budget Wednesday evening.

"I have had constituents reach out to me who stated that they were excited about the idea of no longer having the burden of medical debt," said Mitra Jalali, the St. Paul Ward 4 council member.

The city is teaming up with a national organization called RIP Medical Debt. There is an income criterion for residents, but for every dollar invested, $100 in medical debt is relieved. At least four large, local health systems have supported the initiative, including M Health Fairview, HealthPartners, Allina Health, and Children's.

Mayor Melvin Carter first proposed the Medical Debt Reset Initiative during his August budget address. The city will use a one-time $1.1 million investment of American Rescue Plan funds, which will provide an estimated $110 million in medical debt relief.

"This program is not just about wiping away debts; it is about giving people a chance to breathe, to rebuild, and to reclaim their lives without the weight of medical bills crushing their aspirations," Carter said in August.

However, during Wednesday's council meeting, multiple members questioned whether the initiative is the best use of federal funds when some city leaders haven't heard medical debt as a concern from constituents.

"They want potholes fixed. They want the lights on. They want their taxes not to go up so much. And this is just so random," said Jane Prince, the council member from Ward 7.

Nelsie Yang, the Ward 6 council member, introduced an amendment that would have eliminated the appropriation for RIP Medical Debt from Wednesday’s budget vote, tabling the proposal until next year. She mentioned other initiatives she thought the council should prioritize instead, such as pandemic pay for city workers or helping Catholic Charities with its budget shortfalls.

"I know that we have a lot of residents who right now are facing medical debt, but the truth is they don't have to live in fear, especially with corporations that could just choose to cancel the debt in the first place," Yang said.

Jalali reminded her colleagues that the federal COVID-19 relief funds are meant to help governments recover from the pandemic.

"I'm just confused at how helping people pay medical bills, many of which were probably accrued during the pandemic, is not an eligible expense?" she said.

RIP Medical Debt has said the initiative will help improve patients' credit scores and increase access to medical care. City leaders have noted that medical debt is more prevalent in communities in color.