Illinois medical debt relief program surpasses $1B goal in two years

The state has erased over $1.4 billion in medical debt for almost 700,000 Illinoisans for pennies on the dollar, two years after launching a new relief program.

At its launch, the Illinois Medical Debt Relief Program aimed to eliminate $1 billion in debt. The state has surpassed that goal by $400 million, spending less than $10 million in state dollars to achieve these results. That means that every state dollar invested in the program wiped out over $100 in debt.

That was possible due to the state’s partnership with Undue Medical Debt — a nonprofit that works with local governments and healthcare providers to purchase and eliminate qualifying medical debt owed by low-income residents.

“Medical debt is a leading cause of bankruptcy,” Gov. JB Pritzker said in a news conference Thursday in Chicago. “It can ruin credit, limit financial opportunities, and cause years of uncertainty long after they leave the hospital. That is a symptom of a truly broken system.”

Illinois residents whose household income is at or below 400% of the federal poverty level, or who have medical debt equal to 5% or more of their household income, are eligible.

Residents do not apply to this program — impacted households receive letters after their debts have been erased.

“Healthcare should be about getting people back on their feet, not just keeping them, well, down with years of financial struggle,” Pritzker said.

The statewide initiative was modeled after Cook County’s program that launched in 2022. Since then, the Cook County Medical Debt Relief Initiative has eliminated an additional $1 billion in medical debt, covering 22% of eligible adults.

The American Rescue Plan Act funded the Cook County initiative to support recovery from the COVID-19 pandemic. These funds end this year, Toni Preckwinkle, president of the Cook County Board of Commissioners, said.

“At a time when the Trump administration is stepping back from its federal responsibility to working families, Cook County and the state of Illinois are standing firm in our belief that access to quality healthcare should not depend on your income or your ability to pay,” Preckwinkle said.

Recently, President Donald Trump and the federal government have rolled out cuts to Medicaid, a program that provides free or low-cost coverage to people with limited income and resources.

The Illinois Department of Healthcare and Family Services warned that two policy changes are expected by the beginning of 2027 and may reduce Illinoisans’ eligibility: redeterminations every six months for Medicare eligibility instead of every year and a federal work requirement.

For Steph Willding, CEO of Community Health, a center offering free services for low-income, uninsured and underinsured patients, access to healthcare should never be connected to their ability to pay.

“We know the value of taking away the barrier of cost for our patients, and as federal policy changes continue to threaten healthcare coverage for more and more Illinoisans, this program has never been more important,” said Willding at a news conference.

The average debt relieved of the medical debt relief program per resident was over $1,200, while the highest amount eliminated was over $900,000.

The program relieved debt for residents in all 102 Illinois counties. In 40 counties, more than 5% of residents received debt relief. In 11 counties with populations over 100,000, the percentage was even higher, with Kankakee County at over 21.5%.

Although Cook County will fund this initiative from its own budget, Preckwinkle said they aren’t willing to walk away from the program.

“The next phase of this work will put data from this initiative to use to understand who is being pushed into medical debt and why, and to design policies that address its root causes,” Preckwinkle said.

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This story was originally published by Capitol News Illinois and distributed through a partnership with The Associated Press.