Thousands of families in Hawaii could have their medical debt completely forgiven under a new state programme designed to reduce the financial pressure caused by healthcare bills.
New Law Creates Medical Debt Forgiveness Scheme
Hawaii Governor Josh Green signed Senate Bill 3025 earlier this month, creating the Medical Debt Acquisition and Forgiveness Program. The initiative will be managed by the Department of Human Services’ Office of Wellness and Resilience.
Through the programme, the state will work with nonprofit organisation Undue Medical Debt to purchase eligible medical debt from collection agencies and healthcare providers. Once the debt has been acquired and cleared, eligible residents will receive a letter confirming that their outstanding medical bills have been forgiven.
Families Earning Up to $140,000 Could Qualify
The programme is available to Hawaii residents who meet specific financial conditions. Families may qualify if their household income is at or below 400% of the Federal Poverty Level (FPL). For a family of four in Hawaii, this is around $140,000 per year.
Residents may also qualify if their adjusted gross income (AGI) is $100,000 or less and their medical debt represents at least 5% of their annual household income. The state estimates that at least 50,000 residents could benefit from the programme, representing around $91 million in medical debt relief.
Relief Builds on Existing Healthcare Support
The new initiative expands existing consumer protections already available in Hawaii. Nonprofit hospitals and clinics in the state are required to provide charity care programmes, which can reduce or eliminate healthcare costs for eligible low-income patients before unpaid bills are sent to collection agencies.
The new programme adds another way for qualifying residents to receive support after medical debt has already entered the collections system.
Other States Have Introduced Similar Measures
Hawaii joins other states, including Connecticut, New Jersey and Pennsylvania, that have introduced medical debt relief programmes. The federal Affordable Care Act (ACA) also remains in place, providing financial support through health insurance tax credits, allowing children to stay on parents’ healthcare plans until age 26 and providing other protections.
For eligible Hawaii residents, the new programme could remove a major financial burden and help households dealing with the high cost of medical care.
