Akron shuffles medical debt relief program’s funding source in budget

Akron officials say they’re still on track to help residents eliminate millions of dollars of medical debt, but they’re considering adjustments to how the city will pay the nonprofit working out the details of the program.

A spokesman for Undue Medical Debt — formerly RIP Medical Debt — told the Beacon Journal in November it was negotiating with area hospitals about the purchase of debt and aiming to provide a plan for Akron to unveil in early 2025.

It will be two years in March since city leaders introduced the idea, but Deputy Finance Director Mike Wheeler assured City Council’s Budget and Finance Committee on Jan. 13 that the city has no plans to cut funding to the program even as it reconfigures how it will pay for it in the upcoming budget.

Wheeler explained that the money budgeted for medical debt relief could be split between medical relief and Akron Cares — the city’s utility relief program. The goal is to spend $500,000 on debt relief with an additional $25,000 for Undue to administer the program.

He said Undue is committed to putting at least $250,000 of the city’s money toward debt relief in 2025; if the full $500,000 amount can’t be achieved this year, the rest will go to Akron Cares — “and then we would still like to keep the door open using other funding sources to get to the full $500,000 if they can accommodate it going into ’26, or a later date for that matter.”

City Finance Director Steve Fricker said it was possible Undue Medical Debt will have to buy the debt it intends to retire from a secondary market instead of directly from the hospitals.

Medical debt relief was among Akron priorities to fund using federal American Rescue Plan Act money, but the program’s uncertain timetable necessitated moving it to the city’s general fund, city officials have said. Because the project has not spent ARPA funds, it risked forfeiting the unused balance to the federal government if not expended before 2026.

How will Akron medical debt relief program work?

Residents won’t have to sign up for the program.

Undue Medical Debt will buy bulk batches of medical debt without personal information from the city’s three major hospitals at discounted rates.

In other municipal deals, the organization founded by a former debt collection executive in 2014 has bought and retired $100 in debt for every dollar it’s been given to spend. The organization also has worked with Chicago and the counties surrounding it, Toledo and Lucas County, Cleveland and Columbus.

Contact reporter Derek Kreider at DKreider@Gannett.com or 330-541-9413.

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