COLUMBUS, Ohio (WCMH) — Some Columbus residents could get letters in the mail informing them of voided medical debt by late summer, if Columbus City Council greenlights an ordinance to partner with a national debt forgiveness nonprofit.

The Council is considering entering into a contract with RIP Medical Debt, or RIPMD, a charity organization that buys prior delinquent medical debt in bundles — at a cost of less than $1 per $100 of debt — and erases it for low-income patients. The ordinance was introduced by Council President Shannon Hardin and President Pro Tem Rob Dorans.

Under the current proposal, Council would allocate $2 million from American Rescue Plan Act (ARPA) funds to RIPMD.

Onus is on healthcare providers to agree to debt purchases

But RIP Medical Debt’s successful erasure of some of the debt accrued in Columbus would be contingent on local healthcare providers — whether it be one of the city’s biggest hospital facilities or a smaller practice — agreeing to share and sell off portfolios of debt.

“We can’t force them to participate,” Dorans said, adding that both the city and RIPMD have begun conversations with some local healthcare facilities.

The nonprofit also does not solicit applications from people seeking medical debt forgiveness, meaning Columbus residents won’t have to — and can’t — request relief through the proposal Council is considering, even if they believe they qualify.

RIPMD’s process is to instead work directly with providers by imitating how for-profit debt collection agencies buy medical bills in bundled portfolios.

“Fortunately, in places where we are thinking about working, there are a lot of different providers — whether that’s a physician’s group, whether that’s a hospital. If one hospital isn’t necessarily on board, or maybe they want to see who else picks up the program, that’s okay,” said Daniel Lempert, a spokesperson for RIP Medical Debt.

Once the nonprofit owns a portfolio of debt, it informs those patients via mail that they no longer owe the money and will be freed of associated negative credit.

‘Young organization’ aiming to tackle uniquely U.S. issue

Just after he was born, Dorans said that his father went on strike, and his family lost their health care coverage as a result.

“That’s something that my family carried, literally, from my first days of life,” he said. “When I hear about folks dealing with that here, we are in 2023, rather than the ‘80s.”

Medical debt is an issue somewhat unique to the United States, where health care spending per person is far higher than any other similar country, according to the Peterson-KFF Health System Tracker. 

RIP Medical Debt’s Keith Hearle told public hearing attendees virtually on Monday that patients burdened by medical bills will often put off necessary health care. Hearle serves as the nonprofit’s special adviser on government medical debt relief initiatives. 

“It’s not an obligation of choice,” Hearle said. 

The nonprofit has estimated more than 100,000 Columbus residents are saddled with some amount of medical debt, and that three-fourths of them would qualify for relief under the organization’s standards, according to the ordinance. 

Founded in 2014 by former debt collection executives, RIPMD has largely been funded by donors. Philanthropist MacKenzie Scott, who divorced Amazon founder Jeff Bezos in 2019, has donated $80 million to the organization since 2020, according to Hearle. 

But more recently, it has been growing out a new funding source: City and county governments via ARPA dollars.

Cook County, Illinois — with Chicago as its county seat — was the first, with Toledo and Lucas County following it. Cleveland, Cincinnati and Akron are similarly considering initiatives with RIPMD, Hearle said. 

ARPA-funded program limited to certain city residents

To qualify for the proposed forgiveness, a resident in a single-individual household must either earn about $58,000 or less — 400% of the 2023 federal poverty level, according to the American Council on Aging — or have accrued debt that totals 5% or more of their annual income. 

Although the program will aim to target middle-to-lower income residents, Dorans said the Council and RIP Medical Debt are still discussing how to make sure the nonprofit steers clear of patients who might already qualify for charity care programs. 

While the $2 million is only allocated toward city of Columbus residents, Hearle said RIPMD would consider using other funding sources to cancel the debts of residents in surrounding suburbs. 

“It’s certainly not something the city will provide,” Dorans said. “But I think one of the things that is certainly a benefit of inviting this nonprofit to come here allows us to spur that discussion more holistically.”

The legislation first appeared on the Council agenda in January, but it was tabled until Monday’s public hearing. As contract discussions with RIPMD continue, Dorans said he would like to see a vote on the proposal in April.