: Ohio city and county plan to wipe out up to $240 million in residents’ medical debt — using $1.6 million in federal stimulus money

by | Nov 15, 2022 | Stock Market

An Ohio city and county plan to put federal pandemic-relief dollars toward erasing residents’ medical debt, helping to chip away at a problem that’s costing consumers nationwide at least $195 billion.  The Toledo City Council voted Wednesday to put $800,000 toward eliminating medical debt in the northwest Ohio city through a partnership with RIP Medical Debt, a New York City-based nonprofit that purchases unpaid medical bills in order to erase them. Commissioners in Lucas County, where Toledo is located, intend to match that with their own $800,000, bringing the total to $1.6 million, according to the Toledo Blade. 

RIP Medical Debt uses fundraised dollars to purchase debt in bulk at deeply marked-down prices and sources the debt directly from local hospitals, meaning the $1.6 million deal could potentially result in an erasure of $190 to $240 million in past-due medical bills, according to an initial assessment, said Daniel Lempert, a spokesperson for the nonprofit. However, the total amount will only be cleared once the organization reaches deals with area hospitals.  “Because of our model, and the way medical debt is bought and sold in the U.S., we’re positioned to stretch government funds even farther,” RIP Medical Debt president and CEO Allison Sesso said in a statement. “One dollar into the program abolishes on average $100 of medical debt.” In working with local hospitals, Lempert said that RIP Medical Debt will analyze past-due accounts to find out who is eligible. People qualify for the relief if they earn 400% or less of the federal poverty level (up to $111,000 for a family of four this year) or if the medical debt amounts to 5% or more of their gross annual income. Af …

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