A third of Columbus, Ohio's population just had $335 million in medical debt wiped out thanks to Biden's American Rescue Plan

• Ohio's capital is forgiving $335 million in medical debt.
• Biden's American Rescue Plan funded the forgiveness program.

Over the last two weeks, four hospital systems in Columbus, Ohio began sending hundreds of thousands of letters to residents across the city.

It's one letter they'll be glad to open.

The letters are informing more than 300,000 residents that some, if not all, of their medical debt will be forgiven. All told, the hospitals are wiping clean about $335 million in medical debt for nearly one-third of the city's population.

The relief comes thanks to funds from President Joe Biden's American Rescue Plan — a $1.9 trillion economic package launched in March 2021 that was designed to jump-start the economy amid the COVID-19 pandemic.

The program is only costing the city $500,000, which will go toward reimbursing the hospital systems for sending the letters and other administrative tasks.

The Columbus City Council first approved the plan on October 16 after months of research and planning.

The proposed legislation initially outlined a $200 million forgiveness program that would've cost the city $2 million, City Council President Pro Tem Rob Dorans told Insider. The plan was made together with the Central Ohio Hospital Council, which represents four major hospital systems in the region.

Initially, the city planned to partner with RIP Medical Debt, a nonprofit based in New York.

"RIP Medical Debt was very generous with their time, and they do excellent work," Dorans told Insider. "However, we started having direct conversations with the four hospital systems in central Ohio, and they kept coming to us, saying there may not be a need to have a third party be engaged on this."

Other cities in Ohio have launched similar programs. In Toledo, 41,000 residents saw $240 million in medical debt relief last month, Insider previously reported.

Medical debt is the leading cause of personal bankruptcy in the United States, according to the Associated Press.

To address this nationwide issue, several counties and cities outside Ohio are using their American Rescue Plan funds to forgive medical debt as well. Cook County, Illinois, New Orleans, Louisiana, and Pittsburgh, Pennsylvania, have all implemented similar plans to provide medical debt relief.

Jeff Klingler, president and CEO of the Central Ohio Hospital Council, said he hopes Columbus' model will inspire other cities and hospital systems to adopt similar programs.

"I'm kind of hoping that my counterparts around the country, maybe they'll reach out to us and find out how we did it," Klingler told Insider.

Columbus is providing relief based on income and residence within city limits

To qualify for relief, patients must have received treatment at one of the four hospital systems in the region represented by the Central Ohio Hospital Council and reside within Columbus city limits.

Patients must also have an income between 200% and 400% of the federal poverty level, according to a statement from the Columbus City Council. That's between $55,500 and $111,000 for a family of four.

Anyone who makes less than 200% of the federal poverty level already qualifies to receive medical care free of charge, the statement said.

Relief does not apply to anyone living in the Columbus suburbs in the greater Franklin County region.

For Andrea, a Franklin County resident whose last name is known to Insider but withheld due to privacy concerns, the relief program offered hope until she realized it wouldn't apply to her because she doesn't live within city limits.

Andrea told Insider she has $4,029.25 in medical debt after giving birth at Ohio State University, one of the hospitals covered in the relief plan.

"I was hoping that it was going to be forgiven," Andrea said.

Andrea gave birth just months before the COVID-19 pandemic hit. Over the next year, her husband was laid off, and both of Andrea's parents died.

"The whole world was crumbling," Andrea said. "I was like, 'Who gives a shit about medical bills?'"

Andrea's debt has now been sent to collections, and the state is taking payments out of her tax return. But she's hopeful that, over the next year, she can begin to make larger payments and eliminate the debt.