Kentucky Governor Andy Beshear.
Kentucky Gov. Andy Beshear signed an executive order Tuesday establishing a statewide program expected to erase $250 million in medical debt for more than 130,000 residents.
The Team Kentucky Medical Debt Relief Program directs $2.5 million to Undue Medical Debt, a national nonprofit that purchases qualifying medical debt from participating hospitals and collection agencies at a fraction of its face value and then eliminates the debt.
Under the arrangement, Kentucky says approximately $100 in medical debt can be erased for every $1 spent.
The first phase is already underway. According to the governor’s office, more than $103 million in medical debt has been eliminated for over 46,000 Kentuckians. Letters notifying those residents will begin arriving next week.
There is no application process, and residents cannot request to participate. Instead, qualifying debts are identified through participating health care providers and collection agencies.
Recipients will receive an official letter from Team Kentucky and Undue Medical Debt identifying the debt that has been erased and the creditor involved. No further action is required, although the state recommends keeping the letter as documentation.
To qualify, a person must be a Kentucky resident and either have outstanding medical bills equal to at least 5% of their annual income or have income at or below 400% of the federal poverty level. The governor’s office said the latter threshold is approximately $100,000 annually for a family of three.
“Medical debt isn’t a choice – it’s what people are faced with after a serious accident, cancer diagnosis and more,” Beshear said. “Relieving this debt is the right thing to do to help Kentuckians who are overwhelmed by these extreme costs.”
Undue Medical Debt Vice President of Government Initiatives Courtney Werpy Story said the organization hopes eliminating the debt will reduce financial pressure and encourage some residents to re-engage with the health care system.
The nonprofit has eliminated more than $49 billion in medical debt nationwide, according to the governor’s office.
Once fully implemented, the Kentucky initiative is expected to provide debt relief to more than 130,000 people and eliminate approximately $250 million in outstanding medical bills.
Additional information about the program is available through the state’s Team Kentucky Medical Debt Relief website.
