Recipients will receive a letter confirming the relief. They did not have to apply and do not need to pay, share more information or take any action.
By Hola America
More than 2,775 Quad Cities residents no longer owe a combined $3.5 million in medical debt.
Undue Medical Debt purchased the qualifying bills with support from the Arconic Foundation. The nonprofit then erased the balances instead of collecting them.
Recipients will receive a letter that identifies the canceled debt. The relief is automatic. They do not need to apply, pay a fee or respond to the letter.
The Quad Cities effort is part of a larger project near Arconic facilities. Overall, it erased nearly $30 million in medical debt for more than 26,000 people. The recipients live in Iowa, Pennsylvania, Indiana, New York and Tennessee.
Financial need determined who qualified
Residents qualified under either of two financial standards. Their household income had to be at or below 400% of the federal poverty level. Otherwise, their medical debt had to equal at least 5% of their annual income.
Undue Medical Debt reviews large groups of unpaid medical bills to find eligible accounts. Hospitals, health systems, physician groups and other debt holders make those accounts available.
However, residents cannot apply directly or ask the nonprofit to erase a specific bill. The organization can only purchase debts that participating providers or companies agree to make available.
As a result, someone may meet the financial requirements but receive no relief in this round. The cancellation applies only to the debts listed in the recipient’s letter. It may not cover every medical bill that person owes.
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Recipients do not have to pay or provide more information
Undue Medical Debt will send each notice in an envelope bearing its name. The letter will identify the account that the nonprofit purchased and permanently erased.
The nonprofit never collects money from the people whose debts it buys. Therefore, a real relief notice will not ask for payment to finish the cancellation. It also will not require more personal or financial information.
Undue Medical Debt says the relief carries no federal tax penalty for recipients. It treats the canceled balance as a charitable gift and does not file Form 1099-C with the IRS.
Recipients can verify a letter or request a replacement through the official Undue Medical Debt frequently asked questions. The page also explains how the relief process works.
A $200,000 investment erased nearly $30 million
The Arconic Foundation contributed $200,000 to the nationwide project. That funding erased qualifying medical debts near several Arconic facilities.
Organizations can often purchase unpaid medical bills for a small share of their original value. Undue Medical Debt buys many accounts together and then cancels the selected balances.
On average, the nonprofit says each donated dollar erases about $100 in medical debt. The amount varies for each recipient. In the Quad Cities, the local total works out to about $1,260 per person.
Recipients will remain anonymous unless they choose to share their experiences. Meanwhile, residents who do not receive a letter cannot apply for this round or request relief for a specific account.
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