Kentucky state program cancels millions in medical debt for residents

Governor Andy Beshear established the Team Kentucky Medical Debt Relief Program to cancel medical bills for residents facing financial hardship.

The state used an executive order to direct 2.5 million dollars to Undue Medical Debt, a nonprofit organization that buys unpaid medical accounts from hospitals and debt collectors to forgive the balances. This method allows the state to erase much larger sums of debt than the actual amount of money spent on the program.

The program has already erased 153 million dollars in debt for approximately 67,000 Kentuckians. Residents do not need to apply for the relief as it happens automatically for those who meet specific criteria. To qualify, a person must have medical bills totaling at least 5 percent of their yearly income or earn no more than four times the federal poverty level. The governor's office noted that this income threshold is roughly 100,000 dollars for a three-person household.

The state plans to cancel a total of 250 million dollars in debt for roughly 130,000 residents. Because the program relies on purchasing accounts from willing hospitals or debt collectors, meeting the income or debt requirements does not guarantee that a person will receive relief. The availability of these accounts for purchase determines who eventually receives the debt cancellation.