Akron will no longer use COVID-19 relief dollars to help cancel residents’ medical debt. The debt relief program will still exist - but with a different funding source, according to a Friday news release.
In 2023, city leaders approved using $500,000 of the city’s American Rescue Plan Act allocation to work with a nonprofit, Undue Medical Debt, which connects directly with local hospitals to relieve medical debt.
However, the organization needs more time, officials said.
ARPA dollars have a time limit – they must be spent by the end of 2026.
City officials have decided to instead use money from the city’s general fund for the debt relief program, Mayor Shammas Malik said in the release.
"Our administration remains very supportive of helping to eliminate medical debt for Akron residents in need," Malik said in the release. “If residents aren't struggling with medical debt, they can better afford everyday necessities like food, rent, or receiving regular medical care. This is an innovative solution to an all-too-common problem, and we want to see it work here in Akron."
Going forward, officials will use the city’s remaining ARPA allocation for some fixed expenses, like the city’s contract with the county health department.
"We are getting creative with our funding solution to make sure that not only can we see this program through to completion but also ensure that we aren't forfeiting any ARPA dollars in the process," City Council President Margo Sommerville said in the release. “This program could be life-changing for our residents who are struggling with the burden of medical debt."
The city’s contract with Undue Medical Debt will remain at $500,000; however, the nonprofit has indicated they may only be able to address $250,000 in debt, officials said in the release.
If that’s the case, the rest of the money will be moved to the Akron Cares fund, which helps residents with overdue water and sewer bills, officials said.
How debt relief works
Nonprofits like Undue Medical Debt, formerly known as RIP Medical Debt, work with local health providers and collection agencies to buy debt in bulk for pennies or less on the dollar. The nonprofit can erase, on average, $100 of outstanding debt for every dollar it spends, according to the release.
To qualify for debt relief, individuals must be Akron residents at or below 400% of the poverty line, or carry debt at or above 5% of their annual income, officials said.
Residents do not have to sign up for the debt relief program.
The nonprofit has worked with dozens of cities, including Cleveland and Toledo.
