At the end of 2023, Akron City Council allocated $500,000 of American Rescue Plan Act (ARPA) funds toward a medical debt relief program with a goal of providing relief to some Akron residents struggling to pay medical bills.

Since then, Undue Medical Debt, the non-profit the city contracted with, “has not invoiced the city for any debt it has taken on,” according to a press release from Akron Mayor Shammas Malik’s office.

The city and the nonprofit “remain committed to supporting this effort,” the release stated, and the city wants to allow more time for the non-profit to “work with local providers to alleviate debt.”

To facilitate the extra time, the city is moving the funding for the program from ARPA, which has specific spending and timing requirements, to the city’s general fund budget. The ARPA funds will become “unobligated” and substituted for other previously approved contracts and programs.

Program is looking at potential local partnerships

Undue Medical Debt has been having conversations for the past year with Akron-area hospitals about the proposed debt-relief program. It has concerns about being able to address a program capacity of $500,000, the city said, and have indicated that they can more likely accommodate $250,000.

The agency and the city, the release stated, are looking at options over the next several years to see 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. 

“If residents aren’t struggling with medical debt, they can better afford everyday necessities like food, rent, or receiving regular medical care.” said Akron Mayor Shammas Malik in the release.

“I’m pleased that we are continuing to move forward with the medical debt relief program,” said City Council President Margo Sommerville. “This program could be life-changing for our residents who are struggling with the burden of medical debt.” 

City will substitute some projects to use all of its ARPA funds

The contract between the city and Undue Medical Debt will remain at $500,000. If Undue Medical Debt can’t provide relief for the full amount, any additional funds will be released to the Akron Cares program, which helps residents with overdue water and sewer bills.

To make sure Akron can utilize the full $145 million awarded to the city through ARPA, it will substitute out some projects that were allocated but have flexible, less predictable costs and substitute in some projects and contracts with fixed costs.

For example, according to the statement, some of the costs for renovations to the city’s community centers and pools are still outstanding. Those costs will no longer be paid by ARPA funds and will be budgeted within the city’s general fund. 

The city will then substitute in more predictable fixed costs, like the city’s contract with Summit County Public Health for its annual operating expenses. These fixed costs allow the city to more accurately forecast the final spending amount of the ARPA costs and allocations.

A full list of ARPA substitutions is available here.

How medical debt relief works

Undue Medical Debt partners with local providers, including hospitals and secondary market entities like collection agencies. For every dollar it spends, the non-profit erases, on average, $100 of outstanding debt for the people it helps.

It’s able to do that because it buys up medical debt in large, bundled portfolios at a deep discount, according to its website, and pinpoints the debt of those most in need. Folks with medical debt can’t apply to or request to be part of the program — they’re simply notified of their debt abolishment when it happens.

To qualify, residents must be Akron residents whose income is at or below 400% of the poverty line or carry debt at or above 5% of their annual income.

For example, based on figures from 2022, a family of four in Akron could qualify if they make less than $123, 452, or four times the poverty level of $30,863 for that year.

Editor-in-Chief (she/her)
Zake has deep roots in Northeast Ohio journalism. She was the managing editor for multimedia and special projects at the Akron Beacon Journal, where she began work as a staff photographer in 1986. Over a 20-year career, Zake worked in a variety of roles across departments that all help inform her current role as Signal Akron's editor in chief. Most recently, she was a journalism professor and student media adviser at Kent State University, where she worked with the next generation of journalists to understand public policy, environmental reporting, data and solutions reporting. Among her accomplishments was the launch of the Kent State NewsLab, an experiential and collaborative news commons that connects student reporters with outside professional partners.