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Lexington Becomes First in Kentucky to Wipe Out $12.6 Million in Residents' Medical Debt

The city used a $1 million allocation to partner with Undue Medical Debt, which buys unpaid bills at steep discounts and cancels them.

Overview

  • Officials said the first round abolished $12,641,416 for 6,484 Fayette County residents, with more purchases expected as the program continues.
  • Recipients do not need to apply; Undue Medical Debt will mail notification letters starting this week, and the relief does not create income tax liabilities.
  • The $1 million investment is projected to address up to $90 million over time, leveraging roughly $100 of debt canceled for every $1 spent through bulk purchases.
  • Eligibility is based on Lexington-Fayette residency plus financial criteria, including income up to 400% of the federal poverty guidelines and a debt-to-income threshold that coverage reports as either 5% or 25%.
  • City leaders say the effort aims to ease financial barriers to care and are inviting local hospitals to participate to clear uncollectible accounts in a state where healthcare affordability pressures are widespread.