Kentucky Has Erased $103 Million in Medical Debt for 46,000 People, With $250 Million Planned
Kentucky's $2.5 million investment in Undue Medical Debt has already wiped out $103 million owed by 46,000 residents, and the program aims to reach more than 130,000 people and $250 million. No application is needed.
Kentucky has erased $103 million in medical debt for 46,000 residents so far, part of a state program that aims to wipe out $250 million for more than 130,000 Kentuckians, according to an announcement from Governor Andy Beshear's office. The state put $2.5 million into the effort, which means roughly $100 of debt is erased for every $1 spent.
How a nonprofit buys debt and cancels it
The state is working with Undue Medical Debt, a national nonprofit that buys bundled medical debt from hospitals and collection agencies at a steep discount and then forgives it. Courtney Werpy Story, the group's vice president of government initiatives, put it this way to Louisville Public Media: “We purchase medical debt for a fraction of what is owed and erase it based on the person's income or how much they owe relative to what they earn.”
Beshear announced the program on September 15 through Executive Order 2026-600.
No application, only a letter
Residents qualify if they owe at least 5% of their annual income in medical bills, or if they earn no more than 400% of the federal poverty level, which is about $100,000 for a family of three. There is nothing to apply for, and people cannot ask to be included. Letters telling them the debt is gone began going out the week after the announcement, and recipients need to do nothing further. “There is no paperwork, there are no hoops to jump through,” Werpy Story said.
“Medical debt isn't a choice… Relieving this debt is the right thing to do to help Kentuckians.” — Gov. Andy Beshear
What unpaid medical bills do to credit
Melissa Henry, one of the people receiving relief, said that “debt followed me and affected my credit for years,” and that her loans carried higher interest rates because of it. Louisville Public Media notes that about 40% of American adults reported medical or dental debt in 2022, citing KFF research, and that Lexington's earlier $1 million investment had helped forgive more than $18 million for about 10,000 residents by February 2026.
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