Toledo Plans to Use $1.6M to Wipe Out $240M in Medical Debt

Ohio city is working with nonprofit that buys old debts from hospitals
By Rob Quinn,  Newser Staff
Posted Nov 14, 2022 1:17 PM CST
Toledo Passes Plan to Wipe Out $240M in Medical Debt
The Kaiser Family Foundation estimates that 41% of Americans have some form of medical or dental debt.   (Getty Images/Valeriya)

"Washington might not have a plan for medical debt relief, but Toledo, Ohio, does," says Dr. Michele Grim, a city council member who led an effort to forgive up to $240 million in medical debt—for a lot less than $240 million. The council has passed a measure to use $800,000 in federal COVID relief funds, along with a matching donation from Lucas County, which Toledo is part of, to wipe out medical debt for many residents, BuzzFeed reports. The city will work with RIP Medical Debt, a nonprofit that buys debt from hospitals at a discounted rate, sometimes just pennies on the dollar, depending on how old the debt is, reports WTVG.

County residents will qualify for debt forgiveness if they earn less than four times the federal poverty level and the debt is at least 5% of their annual income. "Medical debt is the number one reason why people go into bankruptcy,” Grim tells BuzzFeed. “A lot of people who have medical debt struggle to put food on the table, avoid going to the hospital, or pay their utilities. I hope it'll help give people the boost they need to go back to the doctor, to pay their rent or mortgage." At least 41,000 people in the county have medical debt and without assistance," their options are to slow pay or not pay at all, further damaging their ability get credit in the future," per the Toledo Blade.

A study last year estimated that one in five Americans has medical debt that is in collections. Grim says the Toledo plan was inspired by a plan passed in Chicago and Cook County last year that aims to use $12 million in federal funding to wipe out up to $1 billion in debt. "We have a broken healthcare system,” Grim says. "We let people suffer, avoid medical care because they can’t pay, and that’s really unfortunate. As a local legislator I can’t fix that system, but I can help people get food on the table again." (More medical bills stories.)

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