Treasurer’s office outlines plan to buy and erase up to $100 million in older medical debt

The treasurer’s office told the Senate Economic Development, Housing & General Affairs Committee on Thursday that it is pursuing a partnership with the nonprofit Undue Medical Debt to purchase and erase older medical debt held by moderate- and low-income Vermonters. The office said it would seek a one-time reappropriation of $1,000,000 that Undue could use to negotiate purchase of roughly $100,000,000 in eligible debt.

The proposal, as described by Becky Washington, director of financial empowerment in the treasurer’s office, would target medical debt between about 18 months and seven years old. Undue, the treasurer’s office said, purchases aged medical debt at a steep discount and then forgives it for affected individuals. “It’s huge. Huge impact for relatively modest money,” Washington said, describing the expected return on the requested appropriation.

Why it matters: the office said aged medical debt can impair credit, raise…