Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Medical Debt topic
No spam. Unsubscribe anytime.
Senate panel approves $1 million appropriation to buy down medical debt under S.27
Summary
The Senate Appropriations Committee voted to pass S.27 as amended, authorizing a $1,000,000 appropriation to contract with the nonprofit Undo Medical Debt to purchase and forgive qualifying medical debts for Vermont residents at or below 400% of the federal poverty level or where debt equals 5% of income.
The Senate Committee on Appropriations voted to pass S.27, as amended, authorizing a $1,000,000 appropriation from the state general fund to the state treasurer to contract with the nonprofit Undo Medical Debt to purchase and forgive qualifying medical debt.
Supporters said the program would buy down an estimated $100 million of medical debt in aggregate for Vermonters who meet the bill’s eligibility criteria — people with incomes at or below 400% of the federal poverty level or whose medical debt equals at least 5% of their income. Committee members cited testimony from an individual in Burlington who said similar debt relief removed a $9,000 burden and improved her ability to care for a new child.
Jen Kirby of the Office of Legislative Counsel explained the committee amendment that narrows the bill’s definition of “medical debt.” "The amendment . . . specifically excludes debt arising from veterinary services," Kirby said, and it excludes general-purpose credit-card charges, home-equity and other secured debt; only credit plans issued solely for payment of health-care services would still count as medical debt for reporting purposes. Kirby said the language for those exclusions was adapted from a Maine statute.
Committee members and staff also discussed fiscal mechanics. The appropriation is drawn from the general fund; the money had been identified in earlier budget activity and reverted before the current BAA process. A staff summary of the fiscal note noted that using $1,000,000 for the debt buy-down reduces interest earnings the state would otherwise realize, an effect the fiscal analysis estimated at roughly $50,000. Gavin (deputy treasurer) confirmed the treasurer’s office proposal and described the operational model: the contractor purchases debt portfolios from providers or collectors and then removes those balances from consumer credit records.
Senators asked how recipients would be prioritized. Committee members said contracting discussions would address targeting (for example, prioritizing lower-income households), but that data limitations can make precise income-targeting difficult where debt bundles do not include complete income documentation. Staff said other states typically start with lower-income borrowers where practicable.
The committee moved to pass S.27 as amended; the clerk called the roll and recorded the vote. The motion carried.
Votes at a glance: S.27 (as amended) — passed by voice/roll call in committee; appropriation: $1,000,000 from the general fund to the state treasurer to contract with Undo Medical Debt to purchase qualifying medical debt. Detailed roll call is recorded below in the actions section.
