Local Government Considers Ordinance to Buy, Forgive Residents’ Unpaid Medical Debts

For what is believed to be the first time, a local government is looking to buy up the unpaid medical debts of tens of thousands of its citizens so the debts can be written off and forgiven.

The Who, What, When, Where, and How: The city council of Toledo, Ohio is set to vote as early as next week on an ordinance last night that, if approved, would earmark $1.4 million of the funds the city received from the American Rescue Plan Act (ARPA) to buy as much as $200 million in unpaid medical debts of Toledo residents. The council would partner with RIP Medical Debt to buy the debts and wipe them out.

• Toledo received approximately $180 million from the federal government through the ARPA. The amount being allocated to this ordinance would account for less than 1% of those funds.

Why This Matters: If the Toledo City Council approves the ordinance, it would become one of the first governments to engage in the purchase and cancellation of medical debts. RIP Medical Debt has partnered with TV stations, churches, healthcare providers, and unions, among others, but has never worked directly with a government at the local, state, or federal level.

• The ordinance is being sponsored by Councilwoman Michele Grim. “I don’t know what better way that would stimulate economic recovery than eliminating people’s medical debt,” she said in a published report. “It means putting food on the table. It means improving credit scores. It means going back to the doctor because they don’t have bills that they can’t pay.”