Undue Medical Erases Billions in Illinois Debt

Tiffany Miller, a 40-year-old mental health caseworker in Aurora, Illinois, received a letter in May that changed her financial standing. The notice from Undue Medical informed her that her medical debt had been erased. Miller had accumulated more than $2,000 in charges after her daughter Brie spent three months in a neonatal intensive care unit in 2019. Despite having insurance, the bills affected her credit report. Miller initially suspected the letter was a scam but confirmed its validity through research.

The letter represented part of a larger effort by Undue Medical to clear outstanding medical bills. The organization stated it provided $53.3 billion in medical debt relief. Approximately half of that total was distributed this year. The group attributed the recent increase in activity to new technology that speeds up file processing and expanded partnerships with government entities.

Illinois provided $10 million to Undue Medical. The nonprofit used those funds to offer more than $1.1 billion in debt relief to state residents. Allison Sesso, the president and CEO of Undue Medical, said the goal is to help patients feel less fear when seeking care. She noted that many people avoid doctors because they worry about the financial consequences of treatment.

Sesso described the assistance as a stopgap for those who need immediate help. She said the current system incentivizes profits over people. The organization purchases large portfolios of medical debt from healthcare organizations and collection agencies at a steep discount. A $1 donation to the group erases about $100 of debt. Individuals earning four times the federal poverty level or less, or those with medical debt equal to 5% or more of their annual income, are eligible for the program.

The relief does not cover everyone. In 2024, Americans owed at least $220 billion in medical debt, according to KFF. About 14 million people owed more than $1,000, and 3 million owed more than $10,000. Emma Wager, a KFF senior policy analyst, said high costs and a lack of insurance leave many people unable to pay for necessary care. Even those with insurance often face high deductibles that make bills unaffordable.

Medical debt frequently lands with collectors. In 2024, 21% of US households had a past-due medical bill, according to Health Affairs Scholar. In 2021, more than half of the bills sent to collectors were for medical care, per the Consumer Financial Protection Bureau. Mary Shannon, director of Care Over Collections, said addressing the affordability crisis in healthcare is the core issue. She believes that solving the root cause of high costs is necessary to fix the problem.

Other groups also help patients manage costs. Dollar For has provided more than $117 million in financial assistance to forgive or reduce debt. The HealthWell Foundation helps with prescription copays and insurance premiums. The Community Service Society of New York advocated for the Fair Medical Debt Reporting Act, which limits how hospitals report patient debt to consumer reporting agencies.

States are working to expand financial assistance. Federal law requires nonprofit hospitals to have a financial assistance policy but does not set minimum eligibility standards. Eighteen states have required all hospitals, including for-profit ones, to offer assistance with specific eligibility rules. Six states have presumptive eligibility laws that require hospitals to screen patients and erase debt if they qualify.

The federal government has also acted on the issue. The Biden administration passed a rule banning medical debt from credit reports. The Trump administration and trade groups asked a federal court to block the measure, and a judge granted that request. However, 16 states currently prohibit or restrict the inclusion of medical debt on credit reports. Sara Collins, a Commonwealth senior scholar, said the issue has a major impact on credit ratings. She noted that people are often saddled with debt for healthcare problems that are not their fault.

A 2025 study from the Missouri Foundation for Health and the Lown Institute found that almost all general hospitals in Missouri offer free or discounted care. Yet, less than a quarter of adults said they received information about these programs from a provider. Advocates argue that providers must do more to inform patients about available financial assistance.