St. Paul mayor Melvin Carter on the city's medical debt cancellation plan

[MUSIC PLAYING] CATHY WURZER: Over in St. Paul, the St. Paul City Council has approved a budget for next year. It includes a tax hike of 3.7% and money for a host of programs and city services. The budget also funnels $1 million in leftover pandemic relief money from the federal government to a nonprofit firm that will help residents who are saddled with medical debt.

When St. Paul Mayor Melvin Carter announced this proposal back in August, he said about 43,000 people could benefit. So now that a plan to partner with the nonprofit RIP Medical Debt has been approved, how will it work? Mayor Carter is on the line. Thanks for making the time.

MELVIN CARTER: Hey, thanks for having me on. It's wonderful to hear your voice.

CATHY WURZER: An estimated one in five households across the US have some amount of medical debt, and they are disproportionately Black and Latino. Do you have a sense of who's struggling with medical debt in your city?

MELVIN CARTER: Everybody. I mean, since Obamacare, of course, most people have health insurance, but we also know that there's co-pays, and we also know that some folks don't. And so there are folks in every community and every zip code and every corner of our city who are struggling with medical debt. Like we said, we think this will impact about 45,000 people, and it's a pretty no-brainer proposal.

With $1 million in COVID relief funds, it's a one time funding source for a one time expense. With a $1 million in COVID relief funds, we can pay off $100 million in medical debt owed by 45,000 residents. It's important because it helps to clear them from a financial stressor.

But even more so, because outstanding medical debt is a pretty proven barrier that keeps people from accessing health care, if we remove that, then people can go to the doctor. And that's a big part of our strategy to say, how do we avoid another pandemic like what we've been through over the last couple of years?

CATHY WURZER: OK. So you say that the city is going to pay about a million bucks to relieve about $100 million in medical debt. Can you explain how that works?

MELVIN CARTER: Yeah. It's actually pretty simple. It's actually not all that creative. Private sector companies buy debt every single day for pennies on the dollar. They pay $1 for the right to hunt somebody down for $100 that they owed to somebody else. That's just how that works. That's how debt trading works in our country all the time. We're just taking the way that industry works and using it on behalf of our residents.

We're partnering with our hospitals to identify low income residents in our city who have outstanding medical debt, and we're going to purchase that debt for pennies on the dollar the same way private sector companies make lots of money by doing it. But instead of hunting them down to collect on the $2,000 or the $150 or whatever it is they owe for a medical procedure in the past, our plan is to forgive it.

CATHY WURZER: Now, Allina Health ran into a buzz saw controversy earlier this year, as you know, when it was found to be blocking care from patients who have acquired at least-- I think it was $1,500 in unpaid debt a number of times. Will Allina participate in this, and will other hospital systems participate? Do you know?

MELVIN CARTER: Yeah. All of our hospital systems have said they're willing to participate. Allina was one of the first on board. We're excited to work with them. It actually wouldn't work well without their participation and without their assistance.

They all want to serve their residents well, but of course, also have financial kind of constraints and challenges that they have to work within, like we all do. So they've all been very eager to work with us to help us clear the slate, and they think it helps them pursue their mission better as well.

CATHY WURZER: Now as you know, not everybody was on board with this last night. Council member Jane Prince, St. Paul Area Chamber of Commerce-- all have argued that it's not a part of the city's responsibility, and the city should focus on things like fixing potholes and that kind of thing. What do you say to that argument?

MELVIN CARTER: Well, first, the city is focusing on fixing potholes. You and I talked about the sales tax that we just proposed that would add a billion dollars over the next 20 years to help us fix our streets the right way. Our public works department did get a significant investment in the budget that was passed last year.

But I think what people are tired of is seeing their neighbors in need, of seeing children being hungry, of seeing people go without homes, and seeing leaders say, well, that's not my job. I think that is a dereliction of duty for a public sector leader to say, we know that there are people in our community, we know we've just been through a pandemic, we know that there are people in our community who have this outstanding medical debt through no fault of their own.

Nobody decided they want to go get a medical procedure to be in debt to a hospital system-- and who know that debt is keeping those individuals and their children from the health care they deserve and to look up and say, yeah, we have the money to do it. We don't actually have a different proposal competing for that money. We just don't think it's our job to help. That's not leadership.

CATHY WURZER: Nelsie Yang, city council member, said last night that-- really, is this the right use of the American Rescue Plan money? She thought it should be used for other needs like pandemic pay for the frontline workers.

NELSIE YANG: As I think about all of the different ways in which this money could be used, while I am very supportive of us allocating money towards the RIP Medical Debt to support paying off debt that maybe folks in our city haven't been able to afford because of income barriers or other barriers, I feel it's really important for the council to have a seat at the table and really holistically think about how we are spending unallocated ARP dollars.

CATHY WURZER: Your response, mayor?

MELVIN CARTER: Again, it's confusing. We hear a lot of times folks who want to say they support something while voting against it. That's obviously not the way the real world works. And when I'm in the barbershop, people call BS on arguments like that. You mentioned pandemic relief or you mentioned a performance pay for workers.

We've already done that performance pay for workers. Maybe we should get the council member a briefing on what we've already done with that resource. But ultimately, the money that we're talking about is pandemic relief funds. And if pandemic relief funds can't be used for an initiative to make sure that our residents can access health care, well, that would be really confusing.

This is exactly what those funds are identified for. It's exactly what the funds are intended to be. Our president has encouraged communities to think about medical debt as something that they use American Rescue Plan funds for, and we're using it in that way. It's not surprising, though. Because one of the things that we do and one of the things that we know is we do things differently.

My administration has done a lot of things differently. When we said we're going to launch every child with a college savings account, people said, that's not the role of city government. And we said we're going to pilot guaranteed income. People say, that's not the role of city government. When we say we're going to eliminate late fines in our library, people say, that's not what a library is.

We're doing things very differently, and I understand it makes people uncomfortable. But I also hear people say all the time that we're uncomfortable with the status quo that we've inherited, that were uncomfortable with the outcomes that we've always achieved.

And so for our administration, what we're saying is our discomfort with the outcomes that our residents have historically faced is bigger than our discomfort with changing the processes. So we're going to change the processes every chance we get when there's an opportunity to provide a better outcome for our residents.

CATHY WURZER: Sounds like Toledo, Ohio, and Chicago have got on this road as well in terms of medical debt for some of their residents. What have you heard about the experiences in those cities?

MELVIN CARTER: They're strong-- Toledo, Chicago, Cleveland. There's a number of cities that have done it. The organization we're partnering with has successfully done this with literally billions of dollars, writing off billions of debt. So when we say it's a 100-to-1 payoff ratio of direct benefit to our residents, that's not an experimental thing. It's not something that we hope or that we think.

It's been proven over the course of billions of dollars. So our $100 million isn't even a major component of their work yet. It's well proven. Some of the mayors who have partnered with them have a lot of really great things to say. John Oliver did a really funny sketch about their work about 10 years ago. So this is work that's very well established, and we look forward.

We're just really excited that the council passed it. We're excited that we had four council members who were willing to step up and stand with St. Paul residents to help send some real needed relief on the way. And we look forward to being able to provide this just real basic support, real basic help to residents at a time where they really need it.

CATHY WURZER: And by the way, when will this help be available? Do you know?

MELVIN CARTER: We're working with RIP Medical Debt. That's the organization that we're working with. They have, over the past couple of months, done the modeling with us. They've partnered with the hospitals to start running some of those numbers. So I imagine in the next couple of months-- and that's one of the intriguing things is there's not an application process.

Nobody has to apply for it. Nobody has to come get in line for it. Nobody has to prove that they have medical debt. We're working directly with the hospitals to identify the debt. And ultimately, those 45,000 individuals will get some mail one day to say, hey. Remember that debt that you used to owe to this hospital? Don't worry about it anymore. It's taken care of.

CATHY WURZER: And I'm sure there'll be some very surprised people when that happens.

MELVIN CARTER: I imagine so. It's a good thing to prove what I said when I got elected. What I said when I got sworn in the first time, Cathy, was that we're going to prove just how relevant City Hall can be in people's everyday lives. I know this.

Most people when they vote for a mayor, they say, that's the person I like, but it's probably not going to change my everyday life all that much. We're proving them wrong. We enjoy being able to show that City Hall, city government, can actually help people just on a day to day basis.

CATHY WURZER: I appreciate the time, Mayor. Thanks so much.

MELVIN CARTER: Thanks so much.

CATHY WURZER: That's St. Paul Mayor Melvin

Carter.