A $500,000 investment by the State of Delaware eliminated almost $19 million in medical debt for around 18,000 residents. The investment was with Undue Medical Debt, a nonprofit organization, with a goal to eliminate as much as $50 million. The nonprofit purchases the most burdensome medical debt in bulk for a fraction of their face value. According to the organization, one dollar can erase as much as $100 in medical debt.
“Medical debt can follow Americans for years, limiting opportunity and creating a burden that no one deserves to carry,” Governor Matt Meyer said. “With this first $19 million wiped away, we’re showing what’s possible when states invest in practical solutions to deliver real relief. We’re already helping over 18,000 Delawareans sleep easier this holiday season, and we look forward to more good news in 2026.”
Medical debt accounts for up to 33 percent of all debt collection cases and comprises 57 percent of small claims court dockets. Medical debt is the most common type of debt collection in Delaware courts. Although past due medical debt can no longer be reported on credit reports in Delaware and it cannot be used against you to obtain employment or housing, creditors are still able to sue which could lead to wage garnishment or other penalties.
Medical debt often impacts those who are low income but have too much income to qualify for Medicaid. Many are underinsured with high copays, something many choose to keep insurance rates affordable. People of color as well as those who have disabilities or young children are also at higher risk of medical debt. Even those with excellent insurance can face high copays for catastrophic illnesses that need specific care, such as chemotherapy or radiation for cancer treatment which, even with insurance, can have copays in the thousands each month.
“We are all just one injury, diagnosis or accident away from having our lives turned completely upside down,” House Speaker Melissa Minor-Brown said. “For thousands of Delawareans, this initiative is lifting the heavy burden of medical debt and providing real, life-changing relief. I’m proud that the General Assembly was able to help make this possible, and I hope even more residents across our state are able to benefit from this effort.”
Those receiving relief are across age ranges, including more than 2,300 young adults aged 18 to 30, nearly 7,000 aged 31 to 45 and more than 4,300 aged 46 to 60. Over 3,000 Delawareans over the age of 61 will also see relief. Eligibility is based on financial need. Delaware residents qualify if their household income is at or below 400 percent of the federal poverty level, which is roughly $100,000 for a family of three, or if their medical debt equals five percent or more of their annual household income.
Qualifying residents will receive a letter directly from Undue Medical Debt confirming their medical debt has been eliminated with letters for the first round of relief set to be delivered between December 19 and 23. No action is required of recipients.
“Medical debt is something that is often completely out of people’s control, but it can have real impacts on their lives and even cause them to delay or skip treatment for serious medical issues,” Representative Kim Williams said. “I’m glad we were able to help and support Delawareans with this initiative and together with my and Senator Mantzavinos’ bill to remove medical debt from credit reports, even more people will have the opportunity to move forward without this financial burden holding them back.”
To date, Undue Medical Debt has acquired and abolished over $23.3 billion in burdensome medical debt, helping over 15 million families and addressing a major social determinant of health.
