Old Medical Debt for Nearly 16,000 Cleveland Residents Cancelled
Nov 20, 2023
Cleveland (Nov. 20, 2023) – Nearly 16,000 Cleveland residents had $33 million in old medical debt held by a local hospital system canceled through RIP Medical Debt.
Council passed legislation to provide RIP Medical with $1.9 million in revenue recovery funds to eliminate about $181 million of Clevelander's medical debt for about 50,000 residents. Council expects other announcements over the next year from other hospital systems.
RIP, a national nonprofit, persuades local hospital systems to let it purchase large, bundled portfolios of past-due medical debt belonging to those least able to pay. Instead of trying to collect, RIP forgives the debt. Eliminating the debt improves resident's credit scores, which makes buying a car, a house or a couch, more affordable.
Some residents are also hesitant to get needed medical care because they have outstanding debts. And two-thirds of US bankruptcies cite medical debt as a leading cause.
“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,” said Councilman Kris Harsh, who co-sponsored the legislation.
Councilman Charles Slife, also a co-sponsor shared, “The impact for our residents is immediate and relieves a giant weight from the shoulders of tens of thousands of Clevelanders.”
So far, RIP Medical Debt has eliminated more than $10.4 billion in medical debt for more than 7.1 million US individuals and families.
“Council made a decision that revenue recovery funds the city received through the American Rescue Plan Act needed to go to residents’ needs and positively impact their everyday lives,” said Council President Blaine A. Griffin. “I’m proud we used the funds for programs like RIP, making our community safer, and for ensuring housing improvements and repairs throughout the city. These impact Clevelanders’ lives.”
Cleveland residents qualify if they live in a household with income up to 400% of federal poverty guidelines or medical debt that is at least 5% of annual household income. The 400% of federal poverty guidelines means about 80% of Cleveland residents are eligible. A one-person household making up to $54,360 is eligible, as is a six-person household making up to $148,760 is eligible.
Residents don’t apply. Instead they will be notified via a branded RIP Medical Debt letter in the mail that their debt is eliminated and is off their credit report. Letters from this initial cancellation to 15,936 residents have recently gone out in the mail and as more local debt is acquired RIP and Council will make further announcements.
RIP Medical Debt can only erase qualifying debts they’re able to acquire from providers (which then decide if they’d like to go public with the partnership). Because debt is sold for a heavily discounted price, one dollar donated can abolish about $100 of medical debt.