Akron officials will partner with a national nonprofit to potentially cancel millions of dollars of residents’ medical debt.
Akron City Council unanimously voted Monday to enter into a contract with RIP Medical Debt, a nonprofit that works with cities to buy up medical debt directly from hospitals and debt collectors at pennies on the dollar of the original cost.
The city will pay the nonprofit $500,000 for this service.
Ward 1 Councilmember Nancy Holland, who represents the Highland Square neighborhood, introduced the idea in March as city officials were finalizing the city’s budget.
“This is one of the biggest causes of becoming unhoused, becoming divorced, becoming bankrupt and sliding into depression and substance abuse issues, so this is a very, very big deal,” Holland said during council’s budget and finance committee meeting Monday.
Since first proposing the idea, Holland has suggested that the city work with RIP Medical Debt. Thenonprofit has already worked with dozens of other cities, including Cleveland and Toledo.
RIP Medical Debt uses a secure data collection system to automatically identify those who qualify for relief, she added, so Akron residents won’t have to apply.
“Nobody’s going to be sorting through your personal income data. This is information that has been compiled and then is sanitized for your privacy, and you will be notified if you are somebody who fits in with the qualifying criteria,” Holland said.
To qualify, residents must earn no more than 400% of the federal poverty level - about $111,000 for a family of four - and their medical debt must equate to 5% of their annual income, she said.
Steve Fricker, the city’s finance director, said he will not know the exact amount of potential debt relief and Akron households impacted until the nonprofit meets with officials at the city's three hospital systems: Summa Health, Cleveland Clinic Akron General and Akron Children’s Hospital.
Residents will still qualify even if they have outstanding medical debt at multiple hospitals, he added.
“If someone did have debt at all three hospitals, I think that debt would basically be written off in three separate installments, because they’d be dealing with each of the three hospitals individually,” Fricker added.
Council’s approval allows city officials to finalize the contract with RIP Medical Debt. The nonprofit can then begin reaching out to the hospitals, and the process could take three to six months, Fricker said.
