Last November, the city announced a partnership with Undue Medical Debt that would cancel $12,641,416.24 in debt for 6,484 Lexingtonians. It was the first round of cancellations as part of a three-year partnership.
Undue Medical Debt works with local hospitals, healthcare systems, and debt collectors to erase medical debt, though the organizations it works with remain confidential. Lexington is the 24th city to partner with the nonprofit.
During a Tuesday work session, councilmembers heard some demographic info for those who had their debt canceled, with some voicing their support.
“I think medical debt, and debt in general, really weighs on people, and it doesn't just affect their mental health, then it feeds back into their physical health…so then it kind of starts this cycle all over again,” said District 5 councilmember Liz Sheehan.
According to a presentation, 82% of those who had their debt erased made below $50,000, and around one-third of those impacted were uninsured. All but 178 individuals made at or below 300% of the federal poverty level.
More women owed debt than men, but men owed more money on average. More than two-thirds of those who had their debt abolished were between the ages of 31 and 60.
The average debt abolished was around $2,000 per person, but the largest amount of debt erased for one person was $230,000.
The city spent $90,254.49 as part of the first wave of debt relief. City officials say the goal is to get rid of $90 million in debt over the three-year partnership.
Households in Lexington making up to 400% of the federal poverty guidelines, or those with debt equal to more than 5% of their household income, are selected to have their debt canceled automatically.
