City of Akron Announces Update on Medical Debt Relief Program

Akron Mayor Shammas Malik and Akron City Council leadership are announcing an update to the medical debt relief program facilitated by Undue Medical Debt, formerly RIP Medical Debt. At the end of 2023, Akron City Council voted to allocate $500,000 of American Rescue Plan Act (ARPA) funds towards the program with a goal of relieving some struggling Akron residents of their medical debt bills. To date, Undue Medical Debt has not invoiced the city for any debt it has taken on, but the city and Undue remain committed to supporting this effort and the city wants to allow additional time for the non-profit to work with local providers to alleviate debt. In order to properly fund the program, the city is moving the funding from ARPA which has specific spending and timing requirements, to the city’s general fund budget. The allocated ARPA funds will be unobligated and substituted for other previously approved contracts and programs.
Undue Medical Debt partners with local providers, like hospitals – as well as secondary market entities like collection agencies -- and for every dollar put towards helping people with medical debt, the non-profit erases on average 100 dollars of outstanding debt because it buys qualifying debt in bulk for pennies or less on the dollar. Residents who qualify must be at or below 400% of the poverty line or carry debt at or above 5% of their annual income. They also must be Akron residents.
Over the past year, Undue Medical Debt has been working directly with Akron’s local hospitals to have conversations about the proposed debt relief program. While Undue Medical Debt continues to work with the hospital systems, they have concerns about being able to address a program capacity of $500,000 and have indicated they can more likely accommodate $250,000 and are looking at options over the next several years of how they can carry out debt relief in partnership with local providers and other sources of qualifying medical debt. One of these options is to work with independent physician groups to buy outstanding debt from them. This process is known as buying debt from the secondary market.
"Our administration remains very supportive of helping to eliminate medical debt for Akron residents in need," said Mayor Malik. "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."
"I'm pleased that we are continuing to move forward with the medical debt relief program," said Council President Margo Sommerville. "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. This program could be life-changing for our residents who are struggling with the burden of medical debt."
The contract between the city and Undue Medical Debt will remain at $500,000. In the event that Undue Medical Debt cannot accommodate the full amount, any additional funds will be released to the Akron Cares program which helps residents struggling with overdue water and sewer bills.
In order to make sure Akron can utilize the full $145 million awarded to the city through the American Rescue Plan Act, the city is substituting out some projects which were allocated but have flexible costs and substituting in some projects/contracts with fixed costs. For example, some of the closing costs for renovations to the city's community centers and pools are still outstanding. These costs will be unobligated and budgeted within the general fund. The city will then substitute in and obligate known fixed costs, like the city's contract with Summit County Public Health for their annual operating costs. These fixed costs allow the city to more accurately predict the final spending amount of these ARPA costs and allocations.
Comments