Lexington invested $1 million in a partnership with Undue Medical Debt, a nonprofit debt relief organization, last year. The group has since bought and canceled $12,641,416.24 dollars worth of debt for 6,484 residents by negotiating with local hospitals.
Lexington Vice Mayor Dan Wu spearheaded the program. He says he hopes it relieves some of the stressors that come with unpaid debt.
“Folks who carry the burden of unpaid medical debt suffer financial hardship, mental strain, poor credit scores, and worst of all, often do not seek much needed medical care,” he said.
The city says to not throw away the letter after it appears in the mail. It could be shown to creditors as proof the debt has been cancelled.
Lexington’s partnership with Undue Medical Debt is through the next three years, having begun last summer. The city projects it to cancel up to $90 million in that time.
“You're never going to get that kind of return on investment on hardly anything else we do with public dollars. So for me, I think it was a very responsible use of our city dollars,” Wu said.
Any household making up to 400% of the federal poverty guidelines, or those with debt equal to more than 5% of their household income, are eligible for that debt relief, which is automatically sent to Lexington-Fayette County residents.
