Using taxpayer funds to cancel medical debt questioned

By Jenny Buccola
The Center Square

A Kentucky policy group questions whether spending $2.5 million in taxpayer funds to wipe out medical debt for nearly 70,000 Kentuckians is a good use of taxpayer funds.

The Commonwealth Policy Center, a conservative non-profit that promotes conservative and Christian values, says the state’s move doesn’t solve the problem.

“Canceling existing debt is a temporary bandage, not a solution to rising healthcare costs,” Jacob Ogan, director of research and publications at the Commonwealth Policy Center said in a statement to The Center Square. “There are also legitimate questions about the governor's authority to redirect taxpayer funds appropriated by the General Assembly for another purpose. Compassion and responsible stewardship should go hand in hand.”

Recently, Gov. Andy Beshear signed an executive order in September launching a medical debt cancellation initiative in cooperation with Undue Medical Debt, a national non-profit, donor-powered organization.

The executive order appropriates $2.5 million in taxpayer dollars for undue medical debt to buy and pay off $250 million in Kentuckians’ medical debts.

Beshear recently announced $153 million in medical debts has been cancelled for 67,000 qualifying Kentuckians.

Undue Medical Debt functions on donations and acquiring debts at wholesale prices, making it possible to pay down debts at a rate of $100 for every dollar granted.

Libertarian organization Bluegrass Institute expressed concern that Beshear’s project is not a comprehensive solution.

“Gov. Beshear is right that healthcare is unaffordable, but this medical debt amnesty doesn’t stop new debt,” Celeb O. Brown, chief executive officer of the Bluegrass Institute told The Center Square. “The core driver is overregulation. To give patients more affordable choices, lawmakers could eliminate the certificate of need cartel and allow new health insurance products.”

Beshear’s order says that medical debt is a struggle for 1 in 3 people in certain Kentucky counties.

“Medical debt is a genuine burden for many Kentucky families,” Ogan said. “But private nonprofits, churches, and charitable organizations are demonstrating how private generosity can help families without placing the burden on taxpayers.”

“Providing relief from medical debt can be life-changing for hardworking Kentuckians,” Beshear stated. “From cancer treatment to giving birth, the stories showcase that medical debt is not a choice, yet it can burden a family for years and keep them from milestones such as homeownership. I am proud of the progress we’re making to provide relief to 130,000 of our people.”

Recipients of Beshear’s debt cancellations do not apply for the program. Undue Medical Debt and Team Kentucky seek out residents of Kentucky who owe at least 5% of their annual income in medical debts or fall below an income bracket within the limits of the federal poverty level.

Qualifying people are notified by letter in two rounds. The first round is complete, and the second notification round is expected to be mailed Monday.