Some Ohio cities are erasing their residents’ medical debt. Here’s how it works

© Getty Images/iStockphoto .

A growing number of Ohio communities are taking steps to erase their residents’ medical debt through government partnerships with RIP Medical Debt, a New-York based nonprofit. 

RIP was founded in 2014 by two former debt collection executives, Craig Antico and Jerry Ashton. 

They “sort of had this Eureka idea about taking advantage of the for-profit debt ecosystem in this country and kind of flipping it on its head,” said Daniel Lempert, vice president of communications for RIP.  

Here’s what you need to know about RIP Medical and which cities are working with the nonprofit to help residents erase medical debt.

Medical debt:Some Akron leaders want to erase medical debt for residents. Will politics stall the aid?

How does RIP pay off medical debt? 

RIP takes donations and buys large bundles of medical debt at a steep discount — $1 usually can leverage $100 in debt relief. The debt erasure is a gift with no tax consequences to recipients. 

The organization has relieved more than $8.5 billion in debt so far and helped nearly 5.5 million individuals and families in all 50 states and Washington, D.C., according to its website and Lempert. 

Up until last fall when Cook County in Illinois became the first governmental body to take $12 million in American Rescue Plan Act dollars to leverage and erase $1 billion in medical debt, RIP was partnering with other nonprofits, such as churches. A Cincinnati church in 2020 erased $46.5 million. Donations can also come from individuals, including some high-profile donors like philanthropist MacKenzie Scott, who has donated $80 million. 

More:Crossroads Church leverages donations to wipe out $46.5 million in medical debt

Why is erasing medical debt important? 

According to the Kaiser Family Foundation, four in 10 adults in the U.S. say they have some kind of medical debt. Two-thirds of bankruptcies cite medical debt as a leading cause. 

Uninsured adults, women, Black and Hispanic adults, parents, and those with lower incomes are especially likely to say they have health care-related debt, the Kaiser study said. 

RIP’s debt erasure work has helped both uninsured and insured who struggle with medical debt from expensive co-pays or costs not covered by insurance, said Lempert.  

More:Families crippled by medical debt, even after comparison shopping to find cheaper treatment

Who qualifies for medical debt relief? 

RIP negotiates and purchases medical debt in bulk from a hospital, which can include current and past-due bills sold to a debt collector.

RIP assists patients with a household income up to 400% of the federal poverty level. That is $54,360 for an individual or $111,000 for a family of four. Additionally, the debt must be 5% or more of annual income. 

Patients can’t apply to be considered for debt relief.

RIP works with participating hospitals to determine which patients are eligible for help based on its criteria.

Based on the seed money provided by participating municipalities, RIP provides an estimate of how much of residents’ medical bills can be erased. The nonprofit also sometimes uses some of its own donated funds to help communities abolish more debt, Lampert said.

The nonprofit does not ask for any demographic information about those in debt, but “we know that medical debt is more burdensome statistically on individuals of color,” said Lampert. 

Which communities are working with RIP to pay off residents’ medical bills? 

In Cook County, Illinois, letters began going out to consumers whose debts have been erased recently.

Toledo became the first Ohio city to partner with RIP with an $800,000 investment in ARPA funds and an equal match from surrounding Lucas County, which could retire $240 million in medical debt.

Then Toledo City Councilwoman Michele Grim started researching RIP Medical in May 2022 after hearing about the work in Cook County. Grim, who introduced it to council in late August, said she had some pushback and skepticism, but the resolution passed in November. Grim, now a state representative, is working on legislation to use ARPA funds to take the idea statewide.

Cleveland City Council introduced legislation to partner with RIP in January to take $1.9 million to erase $190 million in medical debt. It is currently in administrative review before going back to the City Council for a vote.  Two Columbus City Council members are co-sponsoring legislation to take $2 million to abolish $200 million in debt.

Pittsburgh City Council in December earmarked $1 million to settle $115 million in medical debt. 

Some Akron City Council members also are talking with RIP about bringing the program to the community.

How long does this take before consumers in a community could see medical debt relief? 

It depends. In Cook County, it took about seven months after the contract was signed with government officials and after it went through the legislative approval process for consumers to get their debt-erasure letters, said Lampert.  

Toledo, which passed its resolution in November, is still working out contract details with RIP. 

“This is really a simple program,” Grim said. “It’s a one-to-one hundred return on investment and I really can’t think of a more economic and equitable and fair away to use Rescue Plan dollars to help aid in the economic recovery of citizens.”

Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com. Follow her @blinfisherABJ on Twitter orwww.facebook.com/BettyLinFisherABJ.

This article originally appeared on Akron Beacon Journal: Some Ohio cities are erasing their residents’ medical debt. Here’s how it works