Kentucky Governor redirects funds to erase $250 million in medical debt

Kentucky Governor Andy Beshear has signed an executive order establishing the Team Kentucky Medical Debt Relief Program. The initiative redirects $2.5 million in state housing funds to the national nonprofit Undue Medical Debt to purchase and eliminate qualifying medical debt for residents.

The program is expected to erase approximately $250 million in medical debt for more than 130,000 Kentuckians. By purchasing debt at a discount, the state estimates that every $1 spent can erase roughly $100 in medical debt. The first phase of the program is already active, with over $103 million in debt already eliminated for more than 46,000 residents.

To qualify, individuals must be Kentucky residents and meet one of two criteria: earning at or below 400% of the federal poverty level, or owing medical bills that equal at least 5% of their annual income. There is no application process; instead, the nonprofit identifies qualifying debts through participating healthcare providers and collection agencies. Impacted residents will receive notification letters via mail.