Fayette County launches program to abolish medical debt for qualifying residents
LEXINGTON, Ky. (ABC36 NEWS NOW) – In a major announcement at the Government Center Tuesday, Vice Mayor Dan Wu and members of the Urban County Council introduced a new program aimed at wiping out medical debt for qualifying Fayette County residents.
The initiative, announced alongside representatives from Undo Medical Debt, is designed to offer financial relief to people struggling under the burden of medical expenses. Officials say the program will help residents who are uninsured, underinsured or even those with decent insurance who face high deductibles and steep out-of-pocket costs.
“This just doesn’t just affect people who are uninsured, this affects people who are underinsured and this affects people who have regular decent insurance, once you go through your deductible and you start going out of pocket that’s when it happens,” Wu said.
According to the announcement, the new program will focus on families who have been overwhelmed by a lack of coverage or inadequate insurance options.
“There are so many families are one medical debt or one broken down car away from really dire situations where they have to choose from putting food on their table and you add in the government shutdown or the SNAP benefits all these things,” Wu said.
Wu says the city has allocated $1 million to address more than $90 million in medical debt owed by Fayette County residents. He emphasized that no sign-up is required, there are no tax implications, and eligibility is broader than many people might expect. Assistance will be available to residents whose medical debt equals or exceeds 25 percent of their income.
“If you look at that qualification number, if they are within the 400% of the poverty level, I would challenge you to go home and do that calculation — that covers a decent number of people, for a family of 3 it goes into a hundred thousand dollars,” Wu said.
Officials say the program aims to ease the financial strain that keeps many residents from seeking additional medical care.
“Life is so precarious for people and that’s why it was so important to do what we could to take away one element of that precarity,” Wu said.
Residents do not need to apply. Wu says Undo Medical Debt will send letters directly to those who qualify. He added that the effort is expected to reach a wide range of households.
“This will go into the middle class for sure and it’s about debt that’s not being collected, it’s about debt that people are not paying on,” he said.
Wu says the city is also inviting local hospitals to participate, noting that relieving this uncollectible debt could free up resources for those facilities as well.
