Americans may have had trouble paying their medical bills, but RIP Medical Debt will start giving $240 million to those who qualify.
In 2020, $140 billion worth of unpaid medical bills belonged to 18% of Americans who still owed money on their medical bills. (Photo: Shutterstock)
Policy Matters Ohio says that in other parts of Ohio, coronavirus relief money has already been used or is at least being looked at in this way. Toledo and Lucas County have used $1.8 million in ARPA money to help pay off between $190 million and $240 million in RIP medical debts. The Columbus city council is considering spending $2 million, and officials in Cincinnati and Akron have also “expressed interest in the idea.”
In a news release, Cleveland council member Charles Slife from Ward 17 is quoted as saying, “Council is always looking for new ways to improve the lives and finances of Clevelanders.” “The introduction of this ordinance is just one way we’re working to represent our constituents and put government resources to work for them. RIP medical debts forgiveness can be done in a relatively short amount of time and help Clevelanders in a real way, unlike some other APRA plans that could be hard to manage.
The nonprofit’s website says that every day, one in two Americans has to choose between paying their medical bills and meeting their basic needs. Because of the cost, nearly half of Americans have “delayed or skipped” medical care, and two-thirds of those who have gone bankrupt said that medical debt was “a leading cause.”
Policy Matters Ohio says that “low-income and black and brown communities” have the most medical debt. The institute used census data from the Urban Institute to say that 21% of people of colour who live in Ohio ZIP codes have medical debt that has gone to collections, while only 14% of white people do.
On its website, RIP Medical Debt says that it has helped more than 5.5 million families pay off more than $8.5 billion in medical debt so far.
How things work?
First, people give money to RIP Medical Debt. The nonprofit buys debt in large amounts, millions of dollars at a time, on the secondary market. This makes donations go about 100 times further. The $1.9 million that Cleveland gave will pay off about $190 million in medical debt that Clevelanders owe. A city spokesperson said that even though the nonprofit helps people all over the country, the city’s donation will only be used to help people in Cleveland.
2. The group looks at credit agency records to find the people who need help the most. These are households whose debts are at least 5% of their annual income or who earn less than four times the federal poverty threshold, which for a family of four in 2023 is $30,000 per year. The debt to buy is chosen by the nonprofit. There is no way to apply, and people who owe money don’t have to do anything.
3.Once the RIP medical debt is paid off, the people who owed it get a letter telling them. Policy Matters Ohio says that the payment is seen as a gift and is not taxed.
“They don’t have to worry about tax consequences or penalties,” says RIP Medical Debt. “And just like that, they have no more medical bills to pay.”
What comes next?
Council President Blaine Griffin of Ward 6 and council members Kris Harsh of Ward 13, Charles Slife of Ward 17, Kevin Conwell of Ward 9, Rebecca Maurer of Ward 12, Jasmin Santana of Ward 14, and Richard Starr of Ward 5 are all co-sponsors of the resolution. The release says that other members are likely to support it.
Read More:
Finance Tips: Submit Your Taxes Early To Double Your Money
$180 Inflation Relief Checks in Michigan: Will Whitmer Give Stimulus Payments?
