Toledo Ohio is writing off up to $240 million in medical debt for city and county residents by acquiring it for a fraction of the cost.

Some lucky Ohio residents may be getting some good news about their medical debt.

On Wednesday, Toledo . council approved a proposal offering $800,000 to clear medical debt for its residents. The measure was approved after the city engaged commissioners from Lucas County, including Toledo, who indicate the county will contribute $800,000 for debt relief efforts. That brings the total to $1.6 million, which is expected to eliminate up to $240 million in medical debt for residents, Toledo city councilwoman Michele Grim said. Luck.

Grim, who is at the forefront of this measure, said: “Medical debt can happen to anyone. “It is the leading cause of bankruptcy and research shows it harms food and housing security as well as worsens health. Our initiative will help some of the most vulnerable residents as well as working- and middle-class families.”

Toledo is using the $800,000 it received from the US Rescue Plan Act, President Joe Biden’s economic plan to provide emergency funding and relief to people recovering from the pandemic, to purchase their resident debt through RIP Medical Debt, a New York-based organization. nonprofit group that specializes in exactly these types of purchases.

Buy medical debt at a discount and then forgive an individual who has gain some traction in the past few years. Debt is often sold for pennies on the dollar due to one person’s inability to pay. About 41% of adults in the United States have some medical or dental debt, According to the Kaiser . Family Foundation, a healthcare nonprofit, in a report from July this year. Many organizations have been involved in the purchase and write-off of medical debt, but this approach is rarely seen in city or state governments.

Cook County in Illinois, which includes Chicago, has also co-operate with RIP Medical Debt using $12 million of its federal funds, so the nonprofit could negotiate the purchase of more than $1 billion worth of medical debt for county residents and cancel leave it.

“Due to our model and the way medical debt is traded in the United States, we were able to expand government funding further,” said Allison Sesso, CEO and president of RIP Medical Debt. Luck. “One dollar into the program erases an average of $100 in medical debt.”

“Toledo is the first city to approve a community-scale medical debt forgiveness initiative, in partnership with national charity RIP Medical Debt,” Grim said. Luck.

But Ohio’s countywide debt forgiveness hasn’t been done, and residents’ medical debt isn’t going away anytime soon.

Going forward, Grim said that once Toledo and Lucas County officially contract with RIP Medical Debt, they will use the money to buy debt from local healthcare providers. And once the debt is purchased, letters will be sent to those who qualify, notifying them that their debt has been cancelled. She did not further clarify which residents would be eligible.

“Washington may not have a plan to write off medical debt, but Toledo, Ohio does. I hope our efforts will become a model for other communities around the country,” Grim said.

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