An example of the envelope mailed to eligible Illinois residents notifying them that their medical debt has been eliminated. (Medill Illinois News Bureau photo by Kaitlin Bender-Thomas)
Article Summary
- Illinois and Cook County have erased more than $2 billion in medical debt combined for over a million residents through a partnership with a nonprofit that buys medical debt for pennies on the dollar.
- The partnership allows debt to be written off for pennies on the dollar.
- Residents across Illinois say the relief has lifted long-standing financial burdens that had been sent to collections and, in some cases, affected their credit ratings.
- Lawmakers are divided on funding for the state program, with supporters pushing to expand it and critics raising concerns about spending.
This summary was written by the reporters and editors who worked on this story.
SPRINGFIELD — When Kayleigh White opened a plain white envelope stamped “UNDUE” in big, bold blue letters late last year, she threw it away.
The 27-year-old Rochelle resident assumed it was junk mail, or maybe a scam. The letter claimed that her medical debt from 2018, totaling over $1,000, had been erased.
“I didn’t believe it,” she said. “I was like, ‘Who just does that?’”
White was among more than 1 million Illinoisans who have received one of these letters thanks to appropriations from the state and Cook County. For the state, that meant turning a $10 million appropriation into $1.1 billion in debt relief through a nonprofit partnership that buys the debt for pennies on the dollar. Cook County’s $7 million investment erased $820 million in debt.
In 2018, White underwent an MRI after experiencing persistent shoulder pain, which she now believes was linked to the rheumatoid arthritis she was later diagnosed with. At the time, she was a 19-year-old mother who had just aged out of her father’s military insurance coverage and had not yet secured coverage of her own, leaving her with a bill she could not afford.
White carried the debt for years, nearly forgetting about it. Because the state law banning most medical debt from credit reports didn’t take effect until January 2025, the unpaid bill also dragged down her credit score.
So when a notice arrived claiming that her balance had been erased, it felt too good to be true.
White then remembered the QR code on the letter and pulled the envelope from the trash to scan it, half expecting a scam designed to access her personal information.
Instead, the link directed her to information about the Illinois Medical Debt Relief Program, created in 2024 in partnership with the nonprofit Undue Medical Debt. The organization partners with local governments and health care providers to purchase and eliminate qualifying medical debt owed by low-income residents.
Gov. JB Pritzker said during a news conference on Tuesday, March 3, that the Illinois Medical Debt Relief Program has erased $1.1 billion in medical debt, with patients receiving an average of about $1,200 in relief. Cook County’s Medical Debt Relief Initiative has eliminated an additional $820 million in medical debt since it launched its program in 2022.
“Countless people across the state are living proof that this program is more than clearing numbers on a ledger,” Pritzker said. “It is about giving people the freedom and the opportunity to build and live their lives. Lifting the burden of medical debt restores hope. It provides a sense of security.”
Pennies on the dollar
The state’s program, established in 2024 and funded with an initial $10 million appropriation, allows the state to purchase qualifying medical debt for pennies on the dollar and then abolish it.
Read more: Illinois medical debt relief program erases $72M of debt thus far
Courtney Story, vice president of government initiatives at Undue Medical Debt, says hospitals typically bundle old, unpaid medical bills into “bad debt” portfolios once it becomes clear that patients are unlikely to pay. These portfolios are then sold in bulk, often to collection agencies or debt buyers on the secondary market.
Undue Medical Debt purchases those same portfolios from commercial debt buyers on the secondary market or directly from hospitals and health systems. Instead of attempting to collect on the debt, the organization erases the balances altogether.
Because pursuing patients who don’t have the means to pay is often costly with no guarantee of recovery, Story says many medical providers see selling the debt for pennies on the dollar as a way to recover at least some portion of what would otherwise be a total loss.
“Working with us allows them to convert those debt assets into cash,” she said. “Even pennies on a dollar is better than nothing, and for hospitals carrying millions in uncompensated care, selling their qualifying debt to us can actually result in a meaningful amount of money.”
She noted that if hospitals forgave debt directly, patients could face income tax liability. As a third party, however, the organization can relieve debt without imposing a tax burden on the patient.
Under the program, Illinois residents qualify if their medical debt equals at least 5% of their household income or if they earn less than 400% of the federal poverty level. Eligible residents do not have to apply; they will instead automatically receive a letter notifying them that their debt has been eliminated.
White, now married with two children, has been babysitting for the past four years so she can stay home with her youngest. She said she earns only about $5,000 a year from it, so paying the $1,000 bill on her own would have been difficult.
“If you take $1,000 out, I’m only making $4,000 a year. My little penny dollars a week go to groceries,” she said. “Just so I can help out. I don’t know what I would have done. …I don’t even want to know.”
Tolono resident Kelli Daugherty, another beneficiary of the program, said her family fell into medical debt because of a billing mistake.
In 2017, her 18-year-old son was involved in a car accident in Mississippi and was transported to the hospital by ambulance. Although she and her husband had health insurance, the ambulance company billed the wrong provider. After months of back-and-forth attempts to correct the error, the $1,400 bill was eventually sent to collections.
In 2024, during the early stages of the state’s medical debt relief program, Daugherty received a letter informing her that the debt had been erased. Like White, she was initially skeptical. But after researching the organization and the program, she realized it was legitimate and quickly called her son to share the news.
“I’m very grateful we were selected because I don’t really like having anything in collections,” she said.
Had the debt not been canceled, Daugherty said her family would have needed to set up a monthly payment plan and adjust their household budget.
“However much we would have to pay monthly, would have had to come out of the budget for something else. We would have had to decide what we are going to have to sacrifice so we can pay this bill,” she said.
Lawmakers weigh in
The state program has received both support and pushback from lawmakers across party lines.
Sen. Mike Simmons, D-Chicago, was the chief Senate sponsor of the legislation and called the program one of the most concrete accomplishments he has led.
For Simmons, the issue of medical debt is personal. After losing his mother in 2020, he said his family was unexpectedly burdened with medical bills.
“I don’t want any more families to have to experience that. They shouldn’t have to,” he said.
Last month, during his annual State of the State and budget address, Pritzker proposed a $56 billion budget for fiscal year 2027. If approved, it would be the largest in the state’s history, representing a $878 million, or 1.6%, increase over the current year.
Simmons praised Gov. Pritzker’s proposal to allocate $15 million for the continuation of the medical-debt program.
“Everyone understands medical bills, and everybody understands what it means to have them go away. So, I think we’ll see this continue for several years, and as long as I’m a member of the Senate, I’ll keep championing it,” Simmons said.
However, not all lawmakers are in support.
Rep. Chris Miller, R-Hindsboro, one of the most conservative members of the Illinois House, argued Illinois has become a “welfare state” under Pritzker.
Sen. Seth Lewis, R-Bartlett, who, like Miller, voted against the bill creating the program in 2024, said his stance has since evolved.
“If the governor has $15 million lying around and feels the state has it, I’m not as opposed as I once was, seeing some of the emotional, positive benefits,” Lewis said.
He added that a fellow Republican colleague in southern Illinois reviewed the program’s impact in their district and was “pleasantly surprised” to see it helping residents across the state, regardless of political affiliation.
However, Lewis noted that nothing is guaranteed as the state faces budget constraints and competing priorities.
Budget negotiations are underway, with the legislature slated to adjourn on May 31.
“As much as we may agree that $15 million for this is a worthwhile program, the billion dollars going somewhere else that we don’t agree with will override our ability to say yes to the budget,” Lewis said.
Kaitlin Bender-Thomas is a graduate student in journalism with Northwestern University’s Medill School of Journalism, Media and Integrated Marketing Communications, and is a fellow in its Medill Illinois News Bureau working in partnership with Capitol News Illinois.
Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.
