An Innovative Approach to Tackling the National Medical Debt Crisis
Over two-thirds of U.S. adults say they receive medical bills they cannot afford, making medical debt one of the country’s most pressing problems – to the tune of $220 billion.
Unlike “planned” debt like a mortgage, car payment, or student loan, medical debt typically results from the unexpected: an illness, accident, or other medical emergency whose cost quickly drains an individual’s or family’s finances. Health insurance plans with high premiums, deductibles, and out-of-pocket costs further exacerbate the problem.
Eva Stahl
“Half of Americans don’t have $500 for a surprise emergency,” said Eva Stahl, VP, Policy, Engagement and Research, Undue Medical Debt. “And if they can’t afford that type of bill, they certainly do not have the reserves to pay for out-of-pocket medical costs that can soar to over $10,000 for some health plans.”
Stahl noted that even in today’s polarized political landscape, broad consensus exists that health care is no longer affordable, and that medical debt is a real and persistent threat, even among those not experiencing a financial burden. Her organization, Undue Medical Debt, is tackling the problem of medical debt head-on – not by issuing grants or assistance to individuals in need, as some charities do, but by buying medical debt in bulk so those debts then can be abolished on a massive scale. To date, Undue Medical Debt has relieved over $25 billion in medical debt for more than 15 million people across the country.
Reimagining the Medical Debt Ecosystem
Undue Medical Debt has turned the for-profit debt ecosystem on its head by reimagining it as a force for good. The non-profit organization purchases medical debt from hospitals, physician groups, and collections agencies at a steep discount – for pennies on the dollar. Then, instead of requiring individuals to repay that debt, they forgive it completely. Constituents have no adverse tax consequences, obligations, or strings attached.
“One dollar donated can alleviate $100 of medical debt, allowing any donor to be an impactful philanthropist and help many people for a relatively minimal investment,” said Stahl. “Our model also allows donors to target their charity work to help patients in a specific state or county, or at an individual health system, hospital, or physician group.”
Starting with Cook County, Illinois in 2022 and followed soon after by the City of Toledo, Undue Medical Debt has worked with more than 25 local and state government partners around the country to erase residents’ medical debt. As just a few examples of the organization’s impact, over the last several months, Undue Medical Debt has eliminated medical debt for:
- 53,000 New Jersey residents, adding to previous debt relief that now stands at nearly $1.4 billion for over 828,000 New Jerseyans.
- 141,000 Arizona residents, bringing the total amount of medical debt eliminated in the state to $642 million for more than 485,000 Arizonans.
- 39,000 low-income Los Angeles County residents, as part of a landmark initiative that has erased $363 million in medical debt for 171,000 county residents.
Building Trusted Relationships
Undue Medical Debt collaborates with non-profit community partners that are focused on connecting people in need with the right resources at the right time.
For example, they are working with community leaders, health care providers, and advocacy groups in Guilford County, North Carolina, on an initiative called Healing Without Debt. The group held an initial summit in late 2025 to lay the groundwork for collaboration and give residents opportunities to raise questions and share their medical debt experiences with health care and government officials. Two practical tools emerged as immediate priorities: creating a digital toolkit with educational resources accessible via QR code and streamlining intake processes and financial assistance applications so residents can quickly connect to the right support. Future work will build support for new patient navigation pathways, helping community health workers serve as bridges between patients and health systems.
“Partnerships like this one are designed to use the issue of medical debt and medical debt relief to create a launching pad for policy and practice change,” Stahl said. “They help to ensure that all stakeholders are heard and that patients aren’t left out of the discussion and the solutions implemented.”
Undue Medical Debt has also partnered with over 300 health care providers as a valuable partner and supplement for hospitals’ community and financial assistance work. By donating or selling patients’ medical debt to Undue Medical Debt, hospitals and physician groups can:
- Earn revenue from dormant bad debt without subjecting patients to collections actions.
- Address a major social determinant of health/health equity issue.
- Identify opportunities to refine charity care programs and better serve their communities.
“Erasing debt and reducing fear around the cost of care reduce patient anxiety and stress, which is good for health outcomes,” Stahl said. “Beyond erasing debt, we seek to work with health systems to implement practice change that will allow more people to be covered under a hospital’s charity care program instead of falling into the ‘bad debt’ column.”
To help health care providers feel more engaged and empowered to help their patients tackle the medical debt crisis, Undue Medical Debt offers a guide, First Do No Harm: How Clinicians Can Champion the End of Medical Debt. The guide is based on results from clinician focus groups about how they view the medical debt crisis and how they address it with their patients. A companion survey invited patients to share their experiences discussing medical expenses or debt with doctors and hospital staff.
Who Qualifies for Medical Debt Relief?
Medical debt relief from Undue Medical Debt is income-based, not application based; it cannot be requested, and constituents don’t have to apply. Instead, Undue uses a HIPAA-compliant data analytics system to identify qualified accounts and match them to patients.
Qualified accounts are those patients earning four times or below the federal poverty level, or those with medical debt that is five percent or more of their annual income.
“We’re not only helping the uninsured, but we’re also helping the underinsured,” Stahl explained. “Indeed, many of those we help are middle-class Americans and working families who are doing everything right and believe that their insurance should protect them, but who end up with medical debt due to high out-of-pocket and deductible costs.”
Life After Medical Debt
When people have their medical debt abolished by Undue Medical Debt it is often a surprise; they receive a letter out of the blue that their medical debt is no longer owed.
Patients whose medical debt has been abolished by Undue Medical Debt find relief from their financial burdens and improvement to their credit scores, as well as enhanced physical, social, and emotional well-being.
“Debt can be a form of bondage and not something anyone should have to struggle with,” said Kay, a Georgia woman whose medical debt was paid off by Undue Medical Debt. “It is a huge relief to know there’s one less unpaid bill floating around out there in my name.”
“I was shocked when I saw my Undue letter in the mail,” said John from Ohio. “Receiving this relief and feeling the improvement on my credit report helps immensely!”
“I have struggled with medical debt my entire life and have had to declare bankruptcy a couple of times because of it,” said B.T. from Arkansas. “I was so surprised to receive my letter saying an old debt of $819.15 had been paid.”
“I really struggle to make ends meet and have to decide between care and groceries some weeks,” said Tina from South Carolina. “This debt relief will take a huge burden off of me.”
“I incurred medical debt for biopsies and because I had the debt I was unable to seek further care,” said Angelique from Orlando. “This was honestly so surprising and impactful. I am very grateful.”
Click here to read more stories from Undue Medical Debt constituents.
“Stories of how medical debt weighs people down and even makes them sick will unfortunately continue to emerge as health insurance costs continue to rise and consumer protections are rolled back,” Stahl concluded. “People can’t continue to carry this weight. It’s toxic. It’s horrible. And it’s unnecessary.”
