Kentucky has launched a statewide program intended to erase at least $250 million in medical debt for more than 130,000 residents, beginning with notices to roughly 46,000 people whose eligible debts have already been canceled. The relief is automatic: residents cannot apply for it or request that a particular bill be included.

Gov. Andy Beshear signed Executive Order 2026-600 on September 15, directing the Finance and Administration Cabinet to transfer $2.5 million to Undue Medical Debt. The nonprofit purchases qualifying portfolios from participating health care providers and collection agencies, then permanently cancels the accounts. The state estimates that every public dollar will eliminate about $100 in face-value debt.

The first phase has erased more than $103 million owed by more than 46,000 Kentuckians, according to the program’s official FAQ. Letters notifying those residents are expected to arrive beginning next week. A recipient does not need to pay a fee, submit personal information or take another step; the state recommends keeping the letter as proof that the identified debt was canceled.

Eligibility is based on information attached to the debt portfolio rather than an application. A Kentucky resident qualifies if household income is at or below 400% of the federal poverty level, or if outstanding medical debt equals at least 5% of annual household income. The governor’s office put the income threshold at about $100,000 for a family of three, a detail also reported by WFIE.

Those rules do not mean every qualifying resident will immediately receive relief. The program explanation says recipients are identified only after Undue Medical Debt acquires participating portfolios. The FAQ cautions that the nonprofit may cancel some accounts associated with a patient but not others, because a single episode of care can generate bills from multiple providers. Residents therefore should not stop paying an account unless they receive confirmation that the specific debt was canceled.

The program says cancellation is treated as a charitable act by an independent third party and does not create a tax liability. It also says the eligibility review uses a soft credit inquiry, which appears only to the consumer and does not reduce the credit score. Anyone who believes a canceled account was not theirs should contact the provider identified in the notice.

The structure lets the state buy old debt at a steep discount, but the advertised $250 million represents the balances being canceled—not $250 million paid to hospitals or directly distributed to residents. That distinction matters when evaluating the policy’s scale. Kentucky is spending $2.5 million, while the amount ultimately erased depends on which creditors participate and which portfolios the nonprofit can acquire.

For households, the practical instruction is simple: there is no application website, enrollment deadline or legitimate processing fee. Eligible residents will learn they were included through an official letter. Unsolicited demands for payment or sensitive information should be treated cautiously and verified against the state’s program website.