Kentucky’s medical debt relief effort turns $1 into roughly $100 in cancellations, with no application required

Older medical accounts can be purchased for far less than what they originally owed.

Kentucky is easing the strain of unpaid medical bills for thousands of residents through a program that has already wiped out $153 million in debt, according to Medical Daily.

Gov. Andy Beshear’s office said each $1 spent through the initiative eliminates about $100 in medical bills.

What residents should know

People who qualify do not have to submit an application; the relief is issued automatically.

About 67,000 Kentuckians have now had their medical debt erased through the Team Kentucky Medical Debt Relief Program, Beshear’s office said.

The governor’s office said notices should arrive by mail during the week beginning Nov. 9.

The most recent round cleared about $50 million in bills for roughly 22,000 people.

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Becker’s Hospital Review reported the added relief from the second round, while the earlier round in September canceled more than $100 million in debt for about 46,000 residents.

Beshear’s office also stressed that residents cannot ask to have their debts canceled.

Background on the program

The effort targets people whose medical bills create serious financial hardship.

To qualify, a resident must either owe medical bills equal to at least 5% of annual income or have income at or below four times the federal poverty level, according to the governor’s office.

That income cap is about $100,000 for a household of three.

Unpaid hospital or emergency room bills can make it harder for people to keep getting care, adding health risks to the financial pressure.

“Medical debt is not a choice, yet it can burden a family for years and keep them from milestones such as homeownership,” Beshear said in the release.

How the program works

Beshear created the Team Kentucky Medical Debt Relief Program through an executive order, with the aim of canceling $250 million owed by about 130,000 residents.

To help fund it, the state sent $2.5 million to Undue Medical Debt, a national nonprofit that buys unpaid medical accounts from willing hospitals and debt collectors and then forgives the balances, Medical Daily reported.

Because old accounts can be acquired at steep discounts, the money can erase far more debt than the purchase price.

According to Beshear’s office, Undue Medical Debt can only forgive balances when hospitals or collectors agree to sell the accounts, so meeting the income or debt threshold does not automatically guarantee relief.

Whether eligible accounts are available for purchase helps determine who benefits.

“I am proud of the progress we’re making to provide relief to 130,000 of our people,” Beshear said.

Where to learn more

Kentucky’s program was designed to reduce the burden of unpaid medical bills. Related coverage includes stories on consumer debt cancellation in Massachusetts, disputes over hospital charges, and surprise dental treatment costs.

• Massachusetts wiped out $52 million in debt for 6,000 consumers and banned a collector.

• A patient disputed an $85,000 hospital bill, then an AI sweep found $20,000 more.

• A Medicaid patient expecting fillings was presented with a $12,000 dental treatment plan instead.