What You Should Know:
– In a significant step towards alleviating the financial burden of medical debt on its residents, Cleveland has partnered with RIP Medical Debt, a national non-profit organization, to eliminate $33M in medical debt owed by nearly 16,000 Clevelanders.
– This initiative, funded by $1.9M from the American Rescue Plan Act (ARPA), demonstrates the city’s commitment to addressing the critical issue of medical debt and improving the lives of its residents.
The partnership with RIP Medical Debt targets individuals who either dedicate 5% or more of their annual household income to paying off medical debt or fall below 400% of the federal poverty guidelines. This criterion ensures that the program reaches those most in need, providing them with a lifeline out of debt and financial hardship.
RIP Medical Debt Background & Approach
The process of debt elimination is handled directly by RIP Medical Debt, which acquires the medical debt from healthcare providers and then erases it. The organization purchases bundles of medical debt at significantly discounted rates, typically around 1% of their original value, and then eliminates that debt, providing relief to individuals who may have been struggling to make payments.Affected residents are then notified through a branded letter from RIP Medical Debt, informing them of the positive change to their financial situation.
This initial phase of the program is expected to eliminate $181M in medical debt for approximately 50,000 Cleveland residents. The city council anticipates further announcements from other hospital systems over the next year, indicating a potential for even broader debt relief.
“I am proud to see this program up and running to help tens of thousands of Clevelanders stuck in the trap of medical debt and hounded by debt collectors,” remarked councilman Kris Harsh, expressing the city’s commitment to addressing the issue of medical debt and its impact on residents’ lives.
Eligibility and Notification
Residents who qualify for debt elimination based on income criteria will be notified directly by RIP Medical Debt through a branded letter. The single-person income limit is $54,360, and the six-person household income limit is $148,760.
Cleveland City Council’s Proactive Approach
Cleveland City Council’s decision to utilize ARPA funds for this purpose highlights its commitment to addressing the pressing needs of its residents. By partnering with RIP Medical Debt, the council has effectively channeled these federal funds to directly impact the lives of Clevelanders, providing tangible relief and demonstrating the power of community-based solutions.
