Undue Medical Erases $53.3 Billion in US Healthcare Debt

Undue Medical, a nonprofit organization, has reported $53.3 billion in total medical debt relief since its founding in 2014. The group stated that it forgave approximately half of that amount during the current year, a sharp increase it attributes to investments in processing technology and expanded partnerships with state and local governments. The organization purchases large portfolios of medical debt from healthcare providers and collection agencies at steep discounts, allowing it to eliminate the balances for eligible patients without requiring individual applications.

Eligibility for the program is limited to individuals earning four times the federal poverty level or less, or those whose medical debt equals at least 5% of their annual income. When a recipient is identified, they receive a notice that their debt has been absolved, a process that contrasts with the standard billing practices of hospitals and collectors. Allison Sesso, the president and CEO of Undue Medical, described the financial assistance as a stopgap for people who need help today. She noted that the current system incentivizes profits over patient care, and she hopes the relief encourages patients to seek necessary medical treatments without fear of financial consequences.

The scale of medical debt in the United States remains substantial despite these efforts. In 2024, Americans owed at least $220 billion in medical expenses, according to the Kaiser Family Foundation. Approximately 14 million people carried balances exceeding $1,000, while 3 million owed more than $10,000. Emma Wager, a senior policy analyst at the foundation, explained that high costs and a lack of insurance leave many individuals unable to pay for necessary care. Even those with insurance often face high deductibles and cost-sharing provisions that make bills unaffordable.

Past-due medical bills affect a large portion of households. In 2024, 21% of US households had a past-due medical bill, as reported by Health Affairs Scholar. The Consumer Financial Protection Bureau found that more than half of the bills sent to collectors in 2021 were for medical care. Mary Shannon, director of the nonprofit Care Over Collections, stated that addressing the affordability crisis in healthcare is necessary to resolve the fundamental issue of financial trouble caused by medical needs.

Other organizations also contribute to debt relief. Dollar For, a nonprofit, has provided more than $117 million in financial assistance to forgive or reduce medical debt. The HealthWell Foundation helps cover prescription copays and insurance premiums. In Illinois, the state government provided $10 million to Undue Medical, which used the funds to deliver more than $1.1 billion in debt relief to residents.

Legislative efforts aim to protect patients from the financial impacts of medical debt. Eighteen states require all hospitals, including for-profit entities, to offer financial assistance with minimum eligibility standards. Six states have presumptive eligibility laws that require hospitals to screen patients and proactively erase debt for those who qualify. The Biden administration previously banned the inclusion of medical debt on credit reports, but a federal judge blocked the measure after a challenge by the Trump administration and trade groups. Sixteen states currently prohibit or restrict the reporting of such debt.

Tiffany Miller, a mental health caseworker from Aurora, Illinois, received a letter from Undue Medical in May informing her that her debt had been erased. She had accumulated more than $2,000 in debt following the birth of her daughter, despite having insurance. Miller, who initially thought the letter was a scam, said the relief removed financial weight from her life. Brie, her daughter, is now a healthy seven-year-old.