Program set to erase an estimated $181 million in Clevelanders’ medical debts

City funded contract with RIP Medical Debt expected to serve 50,000 residents 

Thursday, September 21, 2023 — Cleveland — Eligible Clevelanders may soon see some or all of their medical debts erased through the city’s contract with RIP Medical Debt.  

The medical debt cancellation contract with the New York-based 501(c)3 was fully executed earlier this month, with an estimated goal to acquire and cancel $81 million in Clevelanders’ qualifying medical debt by the end in 2023 and another $100 million by the end of 2024.  

“Unlike other debts, medical bills are rarely something people can plan ahead or shop around for,” said Mayor Justin M. Bibb. “No one should feel like they are being punished for getting sick and the immediate relief this program provides will be widely felt. I am grateful to City Council for their leadership on this critical economic justice issue.”

In April, Cleveland City Council unanimously passed legislation approving a $1.9 million investment to erase medical debt held by local hospitals, doctors' groups and clinics through RIP Medical Debt.  

The program is expected to help about 50,000 Clevelanders and erase $181 million in medical debt. RIP Medical Debt is currently developing and implementing a plan to recruit hospitals and other providers into the program.  

“I am proud to see this program up and running to help tens of thousands of Clevelanders stuck in the trap of medical debt and hounded by debt collectors,” said Councilman Kris Harsh, who co-sponsored the legislation. “We hope that this can serve as a road map for additional debt relief projects.”

Councilman Charles Slife, also a co-sponsor shared, “This is a major example of our commitment to resolve health inequities in disadvantaged communities and put government resources to work for them. The impact for our residents is immediate and relieves a giant weight from the shoulders of tens of thousands of Clevelanders.”  

In conversations around this legislation, councilmembers also addressed the fact that a disproportionate share of the 1 in 5 American households that owe $2,000 or more in medical debt are Black and Latino.  

“The program is an example of our commitment to resolve health inequities in disadvantaged communities,” Harsh added.  

RIP Medical Debt is known for its work with municipalities nationwide. The nonprofit purchases large bundles of past-due medical debt for pennies on the dollar directly from providers or on the secondary market. Since its establishment in 2014, RIP has abolished more than $10 billion in medical debt, freeing more than 7 million people across all 50 states from the ever-present burden of these bills. On average one dollar donated to the nonprofit erases $100 of face value medical debt.

Residents don’t apply for the debt relief program. As RIP Medical Debt bundles and buys Clevelanders’ debt, residents will be notified via a branded RIP Medical Debt letter in the mail that their debt is eliminated and is off their credit report. The city will announce when the first round of debt abolishment letters is sent.

Those eligible for medical debt abolishment must be City of Cleveland residents and have incomes between zero percent and up to 400 percent of the federal poverty guidelines or have medical debt that is five percent or more of their household annual income.