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The Queen\u2019s Health Systems has already partnered with the national nonprofit Undue Medical Debt as part of an effort to wipe out medical debt owed by tens of thousands of Hawai\u02bbi residents. (Cory Lum\/Civil Beat\/2021)<\/p>\n
The $500,000 appropriated by lawmakers can be used to improve the financial straits of about 50,000 people in Hawai\u02bbi by relieving them of at least $50 million in collective medical debt, said Allison Sesso, president and CEO of New York-based Undue Medical Debt<\/a>. She said hers is the only nonprofit doing that work.<\/p>\n If that sounds like astonishing impact for a relatively modest sum, Sesso said that\u2019s because Undue can buy the medical debt for a tiny fraction of its face value from hospitals, ambulance companies, medical groups and secondary markets that deal in debt.<\/p>\n \u201cIt speaks to the brokenness of the way we finance health care\u2026 and the expectation of what a patient has to pay and what they can actually pay are far apart and growing,\u201d she said.<\/p>\n Undue Medical Debt reports it already has eliminated nearly $40 million in medical debt in Hawai\u02bbi with financing from a mix of individual donors and foundations. The Queen\u2019s Health Systems confirmed it is among the local health care providers that participated.<\/p>\n Formerly known as RIP Medical Debt, Undue was founded in 2014 by debt collection executives Jerry Ashton and Craig Antico with longtime health care executive Robert Goff.<\/p>\n Hefty Bills, No Savings<\/p>\n A KFF Health Care Debt Survey published in 2022<\/a> found 41% of U.S. adults had some level of medical debt at that time. KFF policy analyst Matthew McGough told Civil Beat it is \u201can issue that\u2019s really boiling under the surface, and is a lot more pervasive than many people might realize.\u201d<\/p>\n KFF estimated in a separate analysis<\/a> based on U.S. census data that Americans owe at least $220 billion in medical debt, and McGough said a large portion of that is burdening people who owe more than $10,000. KFF is a nonpartisan health policy research, polling and news organization.<\/p>\n That situation is aggravated across the country by high-deductible health plans that require people to pay thousands of dollars before health insurers pay anything. McGough said many cannot afford those high deductibles, and \u201ca lot of people are kind of one medical emergency away from falling into medical debt.\u201d<\/p>\n Nearly 40% of Americans have less than $500<\/a> in savings, Sesso said, which means many people simply cannot pay an unexpected medical bill of between $2,000 and $5,000.<\/p>\n Lawmakers were told in a series of hearings on SB 3025 this year that medical bills are unlike money owed on credit cards or missed car payments because people don\u2019t choose to take on medical debt.<\/p>\n Matthew Prellberg, policy and communications director for the local nonprofit Holomua Collaborative, reminded legislators that people who are injured or become ill aren\u2019t warned in advance how much their health care will cost them. Holomua advocates for policies that make Hawai\u02bbi more affordable for residents.<\/p>\n When consumers can\u2019t pay big medical bills, Sesso said, many health care providers sell the debt on a secondary market for pennies on the dollar in an effort to get back at least some of the money owed to them. Not all health care providers sell those debts, but many do.<\/p>\n Traditionally it has been private debt collection specialists who buy up that medical debt at a fraction of its original face value. Even if much of the debt they buy is uncollectible, debt collectors can profit if they get just some people to pay a portion of what is owed.<\/p>\n Undue Medical Debt<\/a> takes full advantage of that secondary market by buying debt with the aim of canceling it, Sesso said. The cost varies, but on average she said Undue can acquire medical debt at a rate of $1 per $100 in debt. The older the debt, the lower the price.<\/p>\n Who Would Qualify For Relief<\/p>\n People qualify to have their medical debt canceled by Undue if their earnings fall at or below 400% of the poverty level \u2014 which works out to about $100,000 for a family of three \u2014 or they have medical debt that is 5% or more of their annual income.<\/p>\n There is no application process to have debt canceled, Sesso said. Undue simply sends out letters to qualified debtors to tell them their medical bills have been canceled, and they are in the clear.<\/p>\n Undue purchases medical debt with money it raises not just from from private donations and philanthropies but through its partnerships with 28 state and city governments. Its current mainland government partners include New York City<\/a>, the state of Delaware<\/a>, Lexington-Fayette County<\/a> in Kentucky, and Cook County<\/a>, Illinois.<\/p>\n If Gov. Josh Green signs SB 3025 into law, it would authorize the state Office of Wellness and Resilience to award a contract for the Hawai\u02bbi medical debt initiative without going through the regular state procurement process. Sesso said Undue\u2019s government contracts are all sourced directly to them because it has no competitors.<\/p>\n \u201cIt\u2019s very well documented that we\u2019re the only entity that does this model, and is able to do this work,\u201d she said.<\/p>\n Lee said a no-bid contract for Undue makes sense because the nonprofit has already invested significant time and its own resources preparing for the debt relief initiative in Hawai\u02bbi. <\/p>\n \u201cThey\u2019re the ones that have done all the work with our Hawai\u02bbi people,\u201d he said.<\/p>\n Green declined a request for an interview on the bill, but Director of Communications Makana McClellan said in a written statement that the governor, who also is a doctor, \u201chas seen firsthand the crushing impact of medical debt on our residents and greatly appreciates efforts to ease this burden.\u201d<\/p>\n McClellan stopped short of saying the Green would sign the bill, however. The written statement said only that he will carefully review the measure, and decisions on this and other bills \u201cwill be released at the appropriate time.\u201d July 15 is the deadline for Green to sign, veto bills this year or allow bills to become law without his signature.<\/p>\n![\"Sens.](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/05\/260121-kf-Legislature-1067-1024x682.jpg\")
Sen. Chris Lee, center, addresses the media at the State Capitol earlier this year as Sen. Jarrett Keohokalole, left, and Senate President Ron Kouchi look on. Lee said people with medical debt may have their credit downgraded, which affects their ability borrow to pay for housing or transportation. (Kevin Fujii\/Civil Beat\/2026)<\/p>\n
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