Illinois Proposes $10 Million Allocation to Combat Medical Debt Crisis

Hundreds of thousands of Illinois residents could have their medical debts removed. It is part of a plan outlined by Gov. J.B. Pritzker (D-Illinois) during his February budget address.

“Too many patients leave hospitals with their credit ruined or at risk of bankruptcy in the ensuing months often through no fault of their own, all because our health insurance and our healthcare billing systems are a little bit broken,” Pritzker said during a news conference on Monday.

Approximately 100 million people in the country are plagued by medical debt. In Illinois, approximately 14% of the population has medical debt in collections. “The stress and strain of mounting medical debt on top of a healthcare challenge can significantly and adversely affect an individual’s overall financial well-being, increasing their likelihood of bankruptcy, and even making them reconsider seeking future medical care,” Lizzy Whitehorn, director of the Department of Healthcare and Family Services, stated.

A strategy contained in the proposed budget tries to address high medical expenditures. For the coming fiscal year, the proposed budget would set aside $10 million to pay off $1 billion in medical debt for over 340,000 low-income households.

It would be part of a four-year plan to eliminate $4 billion in medical debt for more than a million Illinois residents. As part of the proposal, the state will collaborate with Undue Medical Debt, a nonprofit dedicated to eliminating medical debt.

“Households with health insurance, and even middle-income families, struggle under the weight of medical debt,” Audra Wilson, president and CEO of the Shriver Center on Poverty Law, stated. “It is crushing, it is massive, and that is why this initiative is so significant.”

Cook County already has a program in place similar to the one suggested by the governor in his budget. They’ve been able to pay off over $350 million in medical debt for roughly 200,000 people.

“By providing relief to our residents, we’re lifting a heavy burden,” said Cook County Board President Tony Preckwinkle. “Family’s finances and futures are changed by giving people a chance to clear up their debts.”

This isn’t the only program that could benefit individuals. A bill unanimously voted by the Senate Thursday would prohibit consumer reporting companies from including negative information about someone on their credit report when it comes to medical debt.

“You shouldn’t have your credit score lowered because of an unexpected illness or injury,” State Sen. Steve Stadelman (D-Rockford) declared. “It’s just not fair and I think medical debt has shown that it’s not a good indicator of one’s ability to pay bills or creditworthiness.”

The proposal is now before the House for further consideration.