Hundreds of millions of dollars in medical debt will be erased for more than 112,000 Hoosiers thanks to the work of nonprofits and an anonymous donor.
“For countless neighbors, a visit to a doctor or a hospital stay can result in debt that haunts them for years,” said Peggy Frame, the executive director for Southeast Community Services.
Frame joined nonprofit and community leaders introducing the gift during a June 17 press conference at Edna Martin Christian Center on the east side.
“It is time for us to acknowledge that health care is a fundamental human right, not a privilege reserved for the wealthy,” she said.
United Neighborhood Centers of Indianapolis partnered with an anonymous donor to send $1.2 million to Undue Medical Debt, a nonprofit that helps pay medical bills plaguing communities across the country. United Way of Central Indiana donated an additional $500,000 to expand the debt relief to residents in Boone, Hamilton, Hancock, Hendricks, Morgan and Putnam counties.
The donations are expected to eliminate nearly $240 million in Hoosier medical debt.
How you qualify
People who qualify are at or below 400% of the federal poverty level — making less than $124,800 a year for a family of four — or have medical debt that’s 5% or more of their annual income. More than 90% of beneficiaries live in Marion County, Frame said.
Undue Medical Debt will use the gifts to buy the debt in bulk, with every dollar donated eliminating about $100 in medical debt.
People who are eligible should receive a letter the week of June 17. Debt is automatically paid without an application or required response. A second letter outlining community resources, including financial advising, job training, child care and Federally Qualified Health Centers, will also be sent.
Indiana ranks among worst in nation
Indiana has one of the highest rates of medical debt in collection in the nation, according to a 2022 report from the Consumer Financial Protection Bureau, with one in six Hoosiers owing an average of $748 in unpaid medical bills.
A report from Undue Medical Debt found that the financial strain disproportionately affects Black, Indigenous and people of color in Marion County, who have a 7% higher share in medical debt than their white counterparts.
Sean Huddleston, the president of Martin University, knows the anonymous donor’s identity and described them as having a “long standing interest” in Marion County.
He read a statement from the person that outlined policy changes they would like to see in tandem with their one-time donation: expanding who qualifies for charity care, delaying collection during appeals, limiting the effects of debt on people’s credit scores and establishing price transparency and standards.
Reforms seemed out of reach at the last legislative session, where Democratic bills aimed at regulating hospital billing practices and protecting consumers from losing their homes to debt collection failed to receive hearings; however, the Republican supermajority passed legislation to lower drug prices and increase oversight of consolidation in the state’s health care systems.
“If policymakers and health systems work together to address this, (debt) will reduce and eventually go away,” Huddleston told Mirror Indy.
Residents struggling with debt will not have to pay income tax on the gift they received, according to United Way of Central Indiana.
Mirror Indy reporter Mary Claire Molloy covers health. Reach her at 317-721-7648 or email maryclaire.molloy@mirrorindy.org. Follow her on X @mcmolloy7.
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