The MetroHealth System has canceled medical debt for 290,761 of its patients in Northeast Ohio for a total of more than $200 million, the health system announced. Those receiving the debt relief will receive letters in the mail stating the outstanding amount has been erased.
The city of Cleveland allocated nearly $1.9 million in federal American Rescue Plan Act (ARPA) funds, provided during the COVID-19 pandemic, for the medical debt relief program. RIP Medical Debt, a nonprofit, received the money from the city to purchase outstanding debts from local hospitals at a fraction of the cost.
Some people had been feeling the burden of medical debt hanging over them every time they thought about their bills, while others had forgotten their debt because they knew they couldn’t afford to pay it. The number one response has been relief, said Cleveland Councilmember Kris Harsh.
“Cleveland just got like $100 million richer, because that money is no longer on anybody's credit reports," he said. "It is forgiven. It is off your conscience and off your shoulders.”
Harsh said about 80% of city residents fall within the parameters to benefit from the program if they have medical debt — that is they earn 400% of the federal poverty guidelines or have debt that is equal to at least 5% of their annual household income.
“Given that we had to spend ARPA money in a timely fashion, and we just looked around for the cost-benefit analysis of what could do the greatest good for the amount of money that we have, I think this has been a fantastic, grand-slam program," Harsh said.
Harsh added one other local health system has already participated, but is choosing to remain anonymous. He said a third Cleveland health system is in the process of coming to an agreement with RIP Medical Debt.
Medical debt is widespread in the U.S. Forty percent of adults may carry unpaid health care bills, according to the Commonwealth Fund.
Harsh said the hope is RIP Medical Debt will continue to raise money through philanthropy to cover future medical debts for city residents.
