Vermont proposes debt relief bill to eliminate medical debt for 60,000 residents

Vermont is poised to tackle the pervasive issue of medical debt with a new legislative proposal aimed at providing significant relief to residents burdened by healthcare costs. During a recent government meeting, officials discussed a bill that seeks to protect Vermonters' credit scores from the negative impacts of medical debt while also working to eliminate a substantial portion of existing medical debt.

The proposal addresses a critical concern: many Vermonters avoid seeking necessary medical care due to fear of accumulating debt. This bill aims to alleviate that fear by ensuring that medical debt does not adversely affect individuals' credit ratings. The legislation is particularly relevant given that medical debt is a leading cause of bankruptcy in the United States and disproportionately affects low-income and marginalized communities.

The initiative is expected to benefit approximately 60,000 Vermonters, with an estimated $100 million in medical debt eligible for relief. The state plans to partner with Undo Medical Debt, a nonprofit organization with a proven track record of successfully negotiating and purchasing medical debt at a fraction of its value. Since its inception, Undo Medical Debt has relieved over $15 billion in medical debt for millions of Americans, making it a suitable partner for Vermont's efforts.

The proposed funding for this initiative is set at $1 million, which would be reallocated from previously appropriated funds intended for bond buy-downs. This strategic move aims to maximize the impact of the funds by directly addressing the financial burdens faced by residents rather than simply reducing state debt.

The process for debt relief would involve Undo Medical Debt analyzing eligible debt files from participating hospitals and providers, purchasing the debt, and notifying individuals of their debt forgiveness. This approach not only provides immediate financial relief but also encourages individuals to seek necessary medical care without the fear of incurring further debt.

As Vermont moves forward with this proposal, officials emphasize the importance of protecting residents from the financial repercussions of medical emergencies. The bill represents a significant step toward addressing the healthcare affordability crisis and improving health outcomes for vulnerable populations across the state.