More than $200 million in medical debt erased by Indiana community organizations

Community organizations in central Indiana partnered to relieve more than $200 million in “significant and compounding” medical debt for about 113,000 Hoosiers. The goal is to alleviate the effect that medical debt can have on individuals, families and communities.

The United Neighborhood Centers of Indianapolis and United Way of Central Indiana contributed more than $1.7 million to purchase and erase the debt of Hoosiers across seven counties in central Indiana.

The organizations worked with Undue Medical Debt, a national nonprofit that buys medical bills that have been sent to collections.

Peggy Frame is with United Neighborhood Centers of Indianapolis, one of the organizations helping erase Hoosier medical debt. She said Indiana should strive for a system that “ensures affordable access” without the fear of “financial ruin.”

“It is time for us to acknowledge that health care is a fundamental human right, not a privilege reserved for the wealthy,” Frame said.

Indiana has the 11th highest percentage of population with a medical debt in collections. About 18 percent of the state has a medical bill that has been sent to collections — with a shared outstanding debt of more than $2 billion.

Nationally, medical debt contributes to two-thirds of bankruptcies filed.

READ MORE: Advocates: Newly signed laws that could limit debt protections 'frustrating'
 

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Sam Snideman, the vice president of government relations for United Way, said these organizations want to pair this with “steps toward a sustainable system for the future.

“While a one-time investment will have a ripple effect for families and community, it doesn't address the root causes of medical debt or financial hardship,” Snideman said.

The organizations advocate for policy changes related to four areas: strengthen charity care policies, limit damage to credit scores, control the cost of care, and address billing and collection practices.

Some of the specific recommendations include preventing wage garnishment to collect unpaid medical debt, requiring debt collectors to inform patients if their medical debt has passed statutory repayment terms and encouraging hospitals to help connect uninsured patients to affordable health plans.

The recommendations are meant to address existing medical debt and prevent further financial hardship.

The organizations' policy recommendations align with some of the 2024 legislative priorities of the Indiana Black Legislative Caucus – but none of their bills got a hearing.

Abigail is our health reporter. Contact them at aruhman@wboi.org.