California-based financial services company EarnIn announced Sept. 19 it abolished $22 million in medical debt, including $13.9 million for eligible Bexar County residents.

The background

According to Urban Credit Institute data, Bexar County has the third-largest amount of medical debt in the United States at 20.9% of the local population.

Officials with EarnIn said health care costs continue to rise nationwide, making it increasingly difficult for many people to pay off a variety of medical bills. According to an EarnIn news release, medical expenses are the biggest driver of bankruptcy in the United States with two-thirds of bankruptcies citing medical debt as the leading cause.

What happened

EarnIn officials said they now seek to help address challenges of financial inequality by eliminating additional medical debt in Maricopa County, Arizona, and Clark County, Nevada—two other counties that are ranked as having poor medical debt consumer protection policies as well as inadequate levels of health insurance, financial assistance policies and Medicaid.

The medical debt relief is being provided in partnership with RIP Medical Debt, a national nonprofit that aims to erase debts for households earning four times or below the federal poverty level, and/or whose debt is 5% or more of their annual income.

The news release states medical debt relief is source-based, meaning the nonprofit can only acquire qualifying debts from amenable providers, such as hospitals, physician groups or collection agencies.

What’s next

Bexar County residents benefiting from this debt relief program will be notified with letters starting to arrive Sept. 23.

What they’re saying

EarnIn CEO and founder Ram Palaniappan said a solution is needed to improve financial access and inclusion, particularly for low-income individuals and families struggling to pay off debt.

“EarnIn’s mission is to make financial momentum accessible to everyone, ensuring they have the financial mobility they deserve. We see this work to abolish medical debt as one of many novel ways by which we are making an impact on the pressing financial challenges of today,” Palaniappan said in a statement.

Allison Sesso, RIP Medical Debt president and CEO, said many Bexar County residents are suffering from medical debt, which forces them to make difficult tradeoffs that prevent them from pursuing goals and achieving financial stability.

“We are grateful for the work that EarnIn is doing to abolish this debt and enable people to advance their lives,” Sesso said in a statement.