City of Cincinnati set to surprise 30,000 people with medical debt relief

The city of Cincinnati will spend $1.45 million on medical debt relief to help 30,000 city residents, part of a bigger plan that's been in the works for more than a year.

It's not clear how the 33,000 would be chosen. Details about how the medical debt relief plan are set to be released Thursday at 10 a.m.

The program will cost taxpayers $1.45 million, but because it pays off debt for pennies on the dollar it's expected to help pay off up to $150 million in medical debt, according to three medical students at the University of Cincinnati College of Medicine who championed the program.

Medical debt payoff part of larger 'Financial Freedom' plan

The medical debt relief program is part of Mayor Aftab Pureval's Financial Freedom Blueprint plan .

The Financial Freedom Plan also includes:

• $375,000 for child savings accounts that would help 500 to 1000 students in Preschool Promise each year for three years. The money would be earmarked for future education or vocational training.
• $250,000 for a guaranteed income program. Combined with other grant money, the city would give out direct payments with no strings attached. It's modeled on a New York City program that gave monthly debit cards to pregnant mothers. The income amount and other details have not yet been determined. In New York City low-income mothers got up to $1,000 a month.

The medical debt relief program is the first of the three-part plan to get underway.

Report: One in three Cincinnati residents behind in paying medical bills

A spokesperson for Pureval said the mayor would reserve comment until the Thursday press conference.

A report released last year outlined the reasons for the plan. Pureval said in the report, "To build a city where everyone has the opportunity to create a rewarding life, we must understand and address ... barriersto financial empowerment."

The report found one in three Cincinnati residents are behind in paying off medical debt.

In February, Cincinnati City Council voted to set aside $2,125,000 to pay for the financial freedom programs.

RIP Medical Debt: How the program works

The city is working with a program called RIP Medical Debt , a national, nonprofit organization that purchases patient medical debt from hospitals and abolishes it, according to advocates of the program.

Families making below 400% of the federal poverty level − or less than $124,800 a year for a family of four − are eligible for forgiveness.

The organization has already forgiven over $8 billion of debt for millions of Americans since its founding in 2014. RIP Medical Debt buys debt at about 1% of its actual dollar value, so with the allocated $1.5 million, the city of Cincinnati could relieve up to $150 million in crushing medical debt for thousands of working families.

This article originally appeared on Cincinnati Enquirer: City of Cincinnati set to surprise 30,000 people with medical debt relief