An effort to erase medical debt is coming to a close – exceeding expectations for the number of residents assisted but leaving about $1 million Cleveland City Council allocated unspent.
Council members announced today that the program benefited 161,481 Clevelanders, thousands more than originally predicted. That’s about 40% of the city’s population.
The effort follows City Council’s decision in 2023 to set aside $1.9 million in federal COVID-19 relief money to cancel medical debt by partnering with a national nonprofit called RIP Medical Debt. The organization has since been renamed Undue Medical Debt.
The nonprofit uses that money to buy up bundles of past-due medical bills from local hospitals or collection agencies on the cheap. It doesn’t collect on the debts, essentially erasing the bill.
City Council did not spend all the money it set aside for the project. Council Member Kris Harsh, a sponsor of the legislation, said more than $1 million remains.
“The whole project came in for well under what we expected,” Harsh said. He called the program a tremendous success.
City Council initially estimated that the $1.9 million investment would cancel debt for 50,000 people, which it far exceeded. The council also estimated the program would relieve $181 million in medical debt, which it fell short of. The program eliminated $165 million total in medical debt, with the average recipient receiving about $1,000 in debt relief. Two individuals did have about $250,000 each in debt eliminated, the city said.
People selected to have debt canceled had to meet an income threshold or have a significant amount of debt relative to their income.
Undue Medical Debt doesn’t purchase debt until after it’s gone through an 18-month collection cycle. The “youngest debt” the nonprofit buys is typically around two years old, said Courtney Story, vice president of government initiatives for Undue Medical Debt.
Harsh said he heard from a number of constituents who had received letters in the mail that their debt has been erased, including a teacher.
“She said, ‘You know, I got this letter. It was a $250 bill. I forgot I even had it, but I’m glad to know that it’s gone,’” Harsh said. “And I think that was probably a common experience for a lot of people.”
The council ended the project with about $1 million unspent in large part because Undue Medical Debt could not find more debt to buy from local hospital systems.
“Ultimately our work depends on hospitals selling us their debt files, and we’ve kind of tapped all of the hospital relationships that we felt that we could in Cleveland,” Story said.
University Hospitals and MetroHealth have both confirmed they partnered with Undue Medical Debt to cancel debt. Cleveland Clinic said in a statement that it did not participate in the debt cancellation program.
“Cleveland Clinic is not participating in Undue Medical Debt’s program because the benefit to patients is unclear, as debts targeted by this initiative are no longer subject to collection efforts and have been written off by the health system,” a spokesperson wrote in a statement to Signal Cleveland.
Story said there are a variety of reasons why hospitals may not want to work with Undue Medical Debt.
“I think some of them think that it doesn’t matter, and they think it’s a lot of work,” Story said. “There’s a lot of misunderstandings.”
Concerns over privacy and sharing personal health information with third parties can also stymy hospitals from joining on, a representative for Undue Medical Debt said at a 2023 city council committee meeting, according to Cleveland Documenters’ coverage.
Hospitals that have participated canceled millions in patients’ debt. In 2024, MetroHealth said it would work with Undue Medical Debt to erase about $136 million worth of unpaid bills. Numbers shared with Signal Cleveland by Undue Medical Debt today put that number closer to $108.6 million, with about 123,000 people served.
Another hospital system, which has gone unnamed, sold $33 million as part of the city’s initiative in 2023. University Hospitals would not confirm they sold that debt.
Undue Medical Debt also bought about $23.7 million in debt from secondary companies that buy and collect on debt.
Harsh said the council would have an internal discussion about how to use the remaining $1 million in COVID relief funds, adding that they would “do something very good for people.”
The dollars, originally received from the American Rescue Plan Act, have to be spent by the end of 2026.
This story was updated to include a statement from Cleveland Clinic about why it did not participate in debt cancellation program.