Illinois Wiped Out $2.5 Billion In Medical Debt For Over A Million People

Illinois has erased $2.5 billion in medical debt for more than one million residents across all 102 counties of the state, and the way it was done is as satisfying as the result. The state partnered with nonprofit Undue Medical Debt, formerly known as RIP Medical Debt, committing $10 million in grants, and that $10 million leveraged into $2.5 billion in relief. The mechanism is simple and ingenious: unpaid medical debt gets sold by hospitals to collections agencies at pennies on the dollar. Undue Medical Debt purchases it at that same rate, then instead of collecting, notifies the people who owed it that their debt is gone. For good. No strings attached. No taxes owed. Just gone. "We take advantage of that pricing, but instead of trying to collect on those debts, we let those people know that we have used either government dollars or donated dollars, and we are relieving them of those debts for good," said Allison Sesso, CEO of Undue Medical Debt. The average elimination across the state was $1,200 per patient. Combined with a separate Cook County program that erased $1.5 billion, total relief delivered to Illinois residents has exceeded $2.6 billion.

Medical debt is the leading cause of personal bankruptcy in the US and affects over 100 million Americans, damaging credit scores and discouraging people from seeking care they need. Illinois is one of a growing number of states using the debt-purchasing model to erase it at scale. Cook County plans to continue the program going forward. For a million families in Illinois, a number that once hung over their finances has now simply disappeared.

Source:https://www.yahoo.com/news/articles/pritzker-announces-2-5b-medical-221000316.html