Investments from United Neighborhood Centers of Indianapolis, United Way of Central Indiana to relieve more than $239.6 million in medical debt throughout region
INDIANAPOLIS – A joint investment of over $1.7 million from United Neighborhood Centers of Indianapolis and United Way of Central Indiana will relieve more than $239.6 million in medical debt for over 112,000 people across the region, United Way and the United Neighborhood Centers of Indianapolis announced at a press conference Monday.
Member centers of the United Neighborhood Centers of Indianapolis devised the idea to create a local medical debt relief effort and partnered with an anonymous donor, who donated $1.2 million to the national nonprofit Undue Medical Debt to abolish more than $169 million of debt for 74,013 people in Marion County.
United Way of Central Indiana joined this effort and contributed an additional $500,000 to Undue Medical Debt to abolish more than $70.4 million of additional debt for over 38,000 people throughout United Way’s service area of Boone, Hamilton, Hancock, Hendricks, Marion, Morgan and Putnam counties.
Undue Medical Debt uses donations to buy medical debt in bulk at a significant discount – often for pennies on the dollar or less. Then, rather than collect the debt, the nonprofit abolishes it instead. As a result, every dollar donated eliminates an average of $100 in medical debt.
Those whose debt has been relieved received a letter in the mail this month from Undue Medical Debt sharing that some or all of their medical debt has been erased. There is no application, and debt relief is provided as a gift, which means people are exempt from paying income tax on the abolished debt. Since debt relief is source-based (often acquired directly from providers like hospitals), relief cannot be requested.
Undue Medical Debt erases debt for people who are at or below 400% of the federal poverty level – for a family of four, that’s an annual income of under $125,000 – or those with a medical debt burden of 5% or more of their annual income.
“Today’s announcement is not just about a crisis intervention. At United Way, we’re fighting for the long-term health and economic well-being of every person in our community,” Fred Payne, president and CEO of United Way of Central Indiana, said at Monday’s press conference at Edna Martin Christian Center at 37 Place.
Payne said this was a moment to better understand medical debt and how it keeps people from financial stability, to shine a spotlight on the work of community organizations that provide free and low-cost health care and financial services to those who need it. And it was the time to advocate for better public policies.
United Way used part of its MacKenzie Scott gift to make the donation. The philanthropist gave $25 million to United Way in 2021, the largest gift the nonprofit has received from a single donor.
Together, the combined donations to Undue Medical Debt will abolish debt as follows:
Boone County: more than $437,300 of debt relieved for 262 people;
Hamilton County: more than $1.2 million of debt relieved for 737 people;
Hancock County: more than $466,600 of debt relieved for 313 people;
Hendricks County: more than $2.2 million of debt relieved for 1,286 people;
Marion County: more than $234.2 million of debt relieved for 108,699 people;
Morgan County: more than $710,200 of debt relieved for 496 people;
Putnam County: more than $272,100 of debt relieved for 225 people.
Medical debt can exacerbate financial turmoil, perpetuate cycles of poverty and hinder the economic growth of communities, Peggy Frame, executive director of Southeast Community Services, said during the press conference.
In Marion County, one in five people have medical debt in collections, and Indiana ranks 11th highest in the U.S. for the number of residents with medical debt in collections, Frame said.
“It's time for us to acknowledge that health care is a fundamental human right, not a privilege reserved for the wealthy,” Frame said. “We must strive for a system that ensures affordable access to quality care without the fear of financial ruin.”
Frame spoke on behalf of the United Neighborhood Centers of Indianapolis, a collaboration among 13 Marion County community centers that provide essential services to low-income neighbors.
Sean Huddleston, president of Martin University, read a statement from the anonymous donor: “The bigger story is the massive problem medical debt creates in our country, state and neighborhoods. We would encourage our state legislators and our medical delivery entities to make policy changes in four areas.”
The four areas:
Strengthening charity care policies: by increasing the income threshold to qualify; establishing policies requiring patients be screened before billing to determine eligibility for financial assistance; and notifying patients of discount options at each payment point in case their income has changed.
Limiting damage to credit scores: by preventing medical debt from being reported against patients’ credit scores and preventing wage garnishment to collect unpaid medical debt.
Addressing billing and collection practices: by requiring debt collectors to inform patients if their debt has passed statutory repayment terms.
Controlling the cost of care: by requiring providers to delay medical debt being referred to collections while billing is being appealed; establishing pricing transparency and standardization; encouraging hospitals to enroll uninsured patients in ACA plans, Medicaid or other resources to ensure the cost of future care would be covered.
Sam Snideman, United Way’s vice president of government relations, said the policy proposals outlined by the donor represent initial steps that can be taken now to ensure the health care system works for people regardless of their income.
Allison Sesso, Undue Medical Debt’s CEO and president, said in a written statement: "It's inspiring to see the scale of impact that can be achieved when community members, community centers and nonprofits collaborate to address a pressing issue. Medical debt is a debt of necessity that disproportionately burdens low-income families and communities of color, and this collaboration will provide much needed relief and hopefully encourage recipients to re-engage with the healthcare system. My sincere thanks to the United Neighborhood Centers of Indianapolis and United Way of Central Indiana, along with the generous, anonymous funder."
For more information about Undue Medical Debt or to interview someone from the national nonprofit, go here.
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About United Neighborhood Centers of Indianapolis
United Neighborhood Centers of Indianapolis (UNCI) is a coalition of 13 community centers that serve neighborhoods throughout Marion County. Individually, each community center works to improve the quality of life in its neighborhood by investing in the people and places they serve. Collectively, UNCI advocates on behalf of, and coordinates programming to serve, residents throughout Marion County. The UNCI member centers oversaw and coordinated the recently concluded IndyRent program, which provided over $194 million in emergency rental relief in response to the COVID-19 pandemic. The following community centers are participants of UNCI:
Christamore House
Community Alliance for the Far Eastside or CAFÉ
Concord Neighborhood Center
Edna Martin Christian Center
Fay Biccard Glick Neighborhood Center
Flanner House
Hawthorne Community Center
John Boner Neighborhood Centers
La Plaza
Martin Luther King Multi-Service Center
Mary Rigg Neighborhood Center
Shepherd Community Center (in partnership with UNCI)
Southeast Community Services
About United Way of Central Indiana
United Way of Central Indiana is a community of donors, advocates, volunteers and partners working to ensure our neighbors can live the lives they’re capable of living. United Way believes every person has a purpose and invites all members of the community to find their purpose by giving, advocating and volunteering to improve lives in Central Indiana. Visit www.uwci.org to learn more.
About Undue Medical Debt
Undue Medical Debt is a national 501(c)(3) nonprofit founded in 2014 by former debt collectors. To date Undue has acquired — and abolished — almost $12 billion of burdensome medical debt, helping over 7 million families and addressing a major social determinant of health. Undue purchases debts for a fraction of their face value in bundled portfolios and partners with individuals, faith-based organizations, government, foundations and corporations to empower donors by converting every dollar contributed into $100 of medical debt relief on average.
Undue partners with hospitals, health systems and physician groups to acquire medical debt for abolishment. Undue rose to national prominence on an episode of HBO’s “Last Week Tonight” with John Oliver in which Undue facilitated the abolishment of $15M in medical debt. To learn more, visit: https://unduemedicaldebt.org/