More than 140,000 Massachusetts residents will get some surprising good news this week – the elimination of part or all of their medical debt.
Three organizations announced on Thursday a massive purchase of debt worth $170 million, they say represents the “largest ever” debt relief effort in Massachusetts.
The group – including the Atrius Health Equity Foundation, Undue Medical Debt, and the Massachusetts Health & Hospital Association – say they plan to cover debts owed by mostly moderate-to-low income people living in Eastern Massachusetts. Debts range from as little as $50 to as much as $450,000, according to a press release.
Allison Sesso, president of Undue Medical Debt, a national group based in New York, said people will be receiving letters by mail that can change their lives.
“They open it up and they sort of are in disbelief, right? I mean, it’s hard to believe that in these days that a piece of good news just sort of drops in your lap,” Sesso said. “When they realize that it’s real, we often hear, you know, messages of not only joy but real relief.”
The effort comes as people across the country suffer from a growing debt burden linked to their health. Despite having some of the highest rates of insurance coverage in the nation, more than 12 percent of the state’s residents have medical debt, according to a report by the Center for Health Information and Analysis.
“People end up with medical bills, whether it’s because of high cost sharing in private health plans, like high deductibles, or whether it’s because there are gaps in coverage in public programs,” said Andrew Cohen, director of Health Law Advocates, a nonprofit law firm that works with Atrius Health Equity Foundation.
The three organizations have jointly relieved a total of $255 million owed by Massachusetts residents since 2023.
Undue Medical Debt uses third-party data to target borrowers who owe 5% or more of their annual income or meet a certain income limit depending on the size of their family. Recipients cannot apply for debt relief.
Using donor and government funds, Undue Medical Debt gathers portfolios of debt from debt collectors, hospitals and other sources, buying them for a fraction of their value.
But purchasing debt only addresses one symptom of a broken health care system plagued by spotty coverage and costly care, said Vikas Saini, President of Lown Institute, an independent health care think tank based in Needham.
“I think experts on medical debt generally, you know, would see this type of action as sort of notable, but really a finger in the dike of a much bigger problem,” Saini said.
While Sesso acknowledged the larger problems, she said relieving debt still frees individuals from burdens including the fear of seeking future care.
“We recognize that what we do is cleaning up the mess at the end of the line, but it’s important for those individuals,” Sesso said. “And I do think that it sparks a larger conversation about what we can do differently.”
In Massachusetts medical debt hits communities of color in particular. One in 5 Black residents reported Medical debt in a state study last year, compared to 1 in 8 white residents.
“We know that medical debt disproportionately impacts low-income populations and populations of color, and so that’s another reason why we are working to address this problem,” said Ann Hwang, president of Atrius Health Equity Association.
Cohen, of Health Law Advocates, said costs keep rising. He and other experts also expect the Trump Administration’s health care cuts mean growing numbers will face medical debt. Still, he said, this week the group can rejoice about helping some people in need.
“It may be in some senses a Band-Aid from a systemic perspective, but when it comes to the relief that it provides individuals, it can really have an absolutely critical impact on their lives,” he said.
