Michigan just erased $74 million in personal medical debt — other states are doing the same. Here’s how you can get relief, too

Gov. Gretchen Whitmer’s office says the move ensures “fewer Michigan families must choose between putting food on the table or paying their medical bills.” State Sen. Sarah Anthony called the relief “a lifeline” and an opportunity at “securing a brighter, financially secure future.”

This round of Michigan relief, done in partnership with the non-profit Undue Medical Debt, follows $144 million worth of debt forgiven for about 210,000 people in the state last summer. Each round of relief targets different jurisdictions within the state. The June 22 press release noted, “more rounds of medical debt forgiveness will take place in the future.”

That relief is desperately needed. The Kaiser Family Foundation reported that Americans owe at least $220 billion in medical debt. Debt.org noted that medical bills are consistently among the top reasons cited for bankruptcies, both because of the money owed and missed work resulting from medical issues.

And even better news: Michigan is one of multiple states partnering with Undue Medical Debt to help residents remove the burden of costly medical bills.

How $4.5 million can erase $74 million in medical debt

There are no strings attached to Undue Medical Debt’s relief. The only eligibility requirements are that the recipient’s debt equals 5% or more of their income, or they earn below 400% of the federal poverty level.

Gov. Whitmer’s office didn’t reply to Moneywise’s request for comment, but they previously noted that the $74 million in medical debt erasure was supported by $4.5 million in state funds.

That math doesn’t seem to add up, especially if you’re trying to settle a debt on your own. But Undue Medical Debt makes it work because when they buy debts from hospitals, it does so for pennies on the dollar, just like debt collectors.

For example, the state’s press release stated that “on average, one dollar given to Undue Medical Debt relieves $100 of medical debt.”

Others have said that a hospital sitting on a $10,000 unpaid surgery bill might receive as little as $100 to $550 from a debt buyer. Usually that debt buyer will then try to collect the full original amount from the person who owes, making a profit in the process.

By contrast, Undue Medical Debt purchases the debt to immediately forgive it. The organization told Moneywise that, since its founding in 2014, it has relieved over $40 billion of medical debt for over 27 million families in all 50 states.

Michigan isn’t the only state working with Undue Medical Debt. Between December 2024 and December 2025, 160,000 Connecticut residents received nearly $200 million worth of medical debt forgiveness.

In March, 27,000 Massachusetts residents received $42 million in medical debt relief. And this month in Kentucky, more than 2,000 Lexington-Fayette County residents welcomed a third round of debt forgiveness totalling more than $23 million so far.

“I think the return on your investment couldn’t be better,” Dan Wu, Lexington’s vice-mayor, said at the time. “There’s basically nothing that we do as government where we get 100 to 1 on our money in terms of return.”

How to reduce your own medical debt

If your state isn’t partnered with a group like Undue Medical Debt, or you don’t qualify for relief based on their requirements, there are still ways you can help reduce your own medical debt.

The non-profit InCharge Debt Solutions recommends negotiating medical bills whenever possible, including checking your bill for errors (always ask for an itemized receipt!), comparing rates with your insurer and others in the region to see if any discrepancies allow for negotiation, offering to settle the bill with a bigger upfront payment in return for a reduced rate, or even speaking with a medical advocate to help make your case.