Illinois erases $1.1B in medical debt for more than 500K residents

CHICAGO - More than 500,000 Illinois residents are receiving letters this week, saying their medical debt has been erased. The state cleared $1.1 billion in unpaid medical bills through a relief program aimed at helping families most burdened by health care costs.

The Illinois Department of Healthcare and Family Services said the program covers households with incomes below 400% of the federal poverty level or with medical debt totaling at least 5% of their annual income. No one needs to apply. Notices are being sent in white envelopes marked with the Illinois seal.

State Senator Mike Simmons led the push for the Medical Debt Relief Program, which became law in 2024. Simmons said the goal is to help residents avoid having to choose between health care and basic needs. "This program is about making sure people aren’t forced to skip doctor visits or delay treatment because of bills they can’t pay," Simmons said Tuesday.

Why you should care:

Medical debt is the most common debt in collections nationwide, according to the Consumer Financial Protection Bureau. Even with insurance, many families in Illinois struggle to pay unexpected medical expenses. This is the largest single action the state has taken to erase medical debt.

How It Works

Illinois partnered with the nonprofit Undue Medical Debt to buy portfolios of unpaid bills from hospitals and collectors. The state pays a fraction of the cost, then forgives the debt for qualifying residents. The current round used $15 million from last year’s state budget.

Governor JB Pritzker has proposed another $15 million for next year, which could help clear more debt if lawmakers approve the funding. That decision is expected in the upcoming budget session.

Who Qualifies

Eligible residents will receive a letter in the mail. There is no application process or paperwork required, and the letter will not request payment or personal information. The program reaches urban and rural communities across Illinois.

The Human Impact

Senator Simmons described finding unpaid medical bills in his mother’s apartment after she died. "So many people in Illinois have been through this," he said. "Our hope is that families will open these letters and feel the weight lifted."

What's next:

Watch for official letters in the mail in the coming weeks. Questions can be directed to hfs.illinois.gov. No response is needed for those who receive a notice.

Lawmakers will decide on additional funding for the program during the next state budget process.