Delaware Partnership to Eliminate $50 Million in Medical Debt

Delaware Gov. Matt Meyer has announced a partnership between the State of Delaware and national nonprofit Undue Medical Debt, leveraging $500,000 in state funds to purchase and eliminate up to $50 million in medical debt for an estimated 17,000 or more Delawareans. 

Meyer also signed legislation protecting tenant records and removing medical debt from credit reporting to help Delawareans improve economic stability.

As NPR has reported, a federal judge ruled in July that medical debt can remain on Americans' credit reports, canceling a policy set in place by the Biden administration to help relieve the burden of healthcare expenses. NPR called the ruling — handed down by U.S. District Court of Texas' Eastern District Judge Sean Jordan — a major blow to the Consumer Financial Protection Bureau (CFPB), which has fought against medical debt as a metric of credit worthiness.

To qualify for debt relief, Delaware residents must have annual household income at or below 400% of the federal poverty level (about $100,000 for a family of three) or have medical debt that equals 5% or more of their annual household income. Medical debt relief will be announced in waves in the coming months.

Undue Medical Debt will purchase bundled medical debt portfolios from providers like hospitals and commercial debt buyers to then abolish that debt at pennies on the dollar. There is no application process. Qualifying residents will receive a letter from Undue Medical Debt notifying them that their medical debt has been relieved.

“Eliminating medical debt restores hope, stability, and dignity to people who’ve been unfairly burdened for seeking care,” said Meyer in a statement. “This partnership and the legislation we signed are part of a larger commitment to break down the structural barriers that keep people from getting ahead and building the secure, healthy lives they deserve. We’re building a state where your worst day doesn’t define your future.”

“I’m incredibly grateful to Governor Meyer and the state of Delaware for the bold leadership in tackling the medical debt crisis at this critical moment,” said Undue Medical Debt CEO and President Allison Sesso in a statement. “With recent federal policy changes threatening millions of families’ access to health insurance and care in general, partnerships like this one become even more essential in providing relief to those most burdened who might otherwise avoid necessary healthcare for fear of the cost. This program will offer both financial and emotional relief to families who never chose to get sick or face medical emergencies and we look forward to leveraging state funding to erase qualifying medical debts in the near future.”