FRANKFORT, Ky (LEX News) — Gov. Andy Beshear announced Tuesday a new initiative aimed at eliminating $250 million in medical debt for more than 130,000 Kentuckians.
Beshear signed an executive order creating the Team Kentucky Medical Debt Relief Program, which will partner with the nonprofit Undue Medical Debt to purchase and erase qualifying medical debt across the commonwealth.
"Medical debt isn't a choice," Beshear said. "Relieving this debt is the right thing to do to help Kentuckians who are overwhelmed by these extreme costs, which can cripple families for years, if not a lifetime."
The governor's order directs $2.5 million in state funding to Undue Medical Debt, a national nonprofit that acquires and forgives medical debt from hospitals and collection agencies. According to the governor's office, every $1 spent through the program is expected to erase about $100 in medical debt.
State officials say the first round of relief will begin this week, with approximately 46,000 Kentuckians receiving up to $100 million in debt forgiveness. Letters notifying eligible residents that some or all of their medical debt has been erased are expected to begin arriving next week.
Undue Medical Debt Vice President of Government Initiatives Courtney Werpy Story said more than $103 million in medical debt has already been erased for over 46,000 Kentuckians through the partnership.
"No one chooses to get sick, get injured or face financial hardship simply because they needed healthcare," Story said. "We hope this relief encourages Kentuckians to re-engage with the healthcare system."
There is no application process for the program. Eligible Kentuckians will automatically receive a letter from Team Kentucky and Undue Medical Debt if their debt qualifies for relief.
To qualify, a person must be a Kentucky resident whose medical debt equals at least 5% of their annual income or whose household income is at or below 400% of the federal poverty level, which state officials said is about $100,000 annually for a family of three.
During Tuesday's announcement, Beshear was joined by Melissa Henry, a Kentucky resident who said chronic back pain and multiple surgeries left her with thousands of dollars in medical debt.
Henry said having a portion of her debt erased helped improve her financial outlook after years of struggling with the long-term impacts of unpaid medical bills.
The governor's office said relieving medical debt can help improve credit scores and remove financial barriers that may prevent families from obtaining loans, purchasing homes or accessing other opportunities.
More information about the Team Kentucky Medical Debt Relief Program is available at https://medicaldebtrelief.ky.gov/.
