By Karim Hammam
Millions of Americans remain burdened by medical debt even as nonprofit organizations and state governments expand relief programs, leaving experts to warn that stopgap measures fail to address the fundamental affordability crisis in U.S. healthcare.
Scale of the Crisis
In 2024, U.S. residents collectively owed at least $220 billion in medical debt, according to KFF, a nonprofit health research group. About 14 million people owed more than $1,000, and 3 million owed more than $10,000. The journal Health Affairs Scholar reported that 21% of U.S. households carried a past-due medical bill last year, while the Consumer Financial Protection Bureau found that more than half of all bills sent to collectors in 2021 were for medical care.
Nonprofit Relief Efforts
Organizations such as Undue Medical Debt, founded in 2014 by former debt-collection executives, purchase large debt portfolios at a steep discount. The group says a $1 donation erases roughly $100 of medical debt for individuals earning up to four times the federal poverty level or with debt exceeding 5% of annual income. Undue Medical Debt reports providing $53.3 billion in relief, with about half delivered in 2026 following technology upgrades and expanded government partnerships. In Illinois, a $10 million state allocation enabled more than $1.1 billion in debt relief for residents. Other nonprofits, including Dollar For and the HealthWell Foundation, have provided $117 million and assistance with copays and premiums, respectively.
Policy Responses
New York’s Fair Medical Debt Reporting Act now bars hospitals from reporting medical debt to credit agencies. Eighteen states require all hospitals to offer financial assistance with minimum eligibility standards, and six states have enacted “presumptive eligibility” laws that mandate proactive screening and debt erasure for qualifying patients. A Biden administration rule banning medical debt from credit reports was blocked by a federal judge after a challenge from the Trump administration and trade groups, though 16 states maintain their own restrictions. Sara Collins, a senior scholar at the Commonwealth Fund, said the debt “has a major impact on people’s credit ratings.”
Personal Impact
Tiffany Miller, a mental health caseworker from Aurora, Illinois, accumulated more than $2,000 in debt after her daughter’s premature birth and extended neonatal care, despite having insurance. In May she received a letter from Undue Medical Debt informing her the debt had been erased. “I thought it was a scam,” Miller said, but research confirmed it was genuine. Her daughter, now seven, is healthy. Another recipient, identified as Harris, said the relief “felt like those financial weights that have accumulated over the years, like a couple of them were taken off.”
Systemic Gaps
Allison Sesso, president and CEO of Undue Medical Debt, called the assistance “a stopgap for people that need help today” and argued that the healthcare system “incentivizes profits over people.” Advocates say providers must do more to inform patients about financial aid; a 2025 Missouri study found that while nearly all general hospitals offer free or discounted care, fewer than a quarter of adults reported receiving information about such programs.
