Cleveland erases medical debt for 160,000 residents
More than 160,000 Clevelanders have had their medical debt wiped away after Cleveland City Council allocated $1.9 million in pandemic stimulus money for the effort.
The big picture: More than 100 million people nationwide are burdened with unpaid medical bills, per the Kaiser Family Foundation, affecting their credit score, financial outlook and quality of life.
How it worked: In 2023, the city partnered with the organization Undue Medical Debt (formerly known as RIP Medical Debt), which bought portfolios of delinquent debt in bulk from hospitals and collection agencies for pennies on the dollar.
The acquired debt was then forgiven.
State of play: Cleveland's modest investment has had a huge impact.
City Council initially estimated when it authorized the spending that 50,000 Clevelanders would have their debt erased.
By the numbers: A total of 161,481 individuals have had $165,234,311 in medical debt erased.
Between the lines: There was no application process. Residents were eligible if their household made up to 400% of the federal poverty level or held medical debt equal to 5% or more of their annual household income.
Nearly $3 million in suburban residents' debts were included in the purchased portfolios, but the funds city council allocated were used only for Clevelanders.
What's next: Nearly $1 million of the $1.9 million funding remains unspent, and city council is now considering ways to reinvest it.
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