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Pritzker wants $40 million for medical debt despite research showing limited benefit

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(The Center Square) – Illinois Gov. J.B. Pritzker wants $40 million in taxpayer funds over four years to pick up the tab for hundreds of thousands of individuals’ medical debt.

During a news conference in Chicago on Monday, Pritzker said 14% of the state’s population has medical debt in collections with minority communities disproportionately impacted. He called medical debt a “uniquely American issue.”

“It’s preventing individuals and families from attaining financial stability,” Pritzker said. “And, research shows it’s also having day to day impacts for all the affected individuals like emotional distress and difficulty meeting basic needs.”

However, a study released this month by the National Bureau of Economic Research concluded while there is a statistical significant reduction in payment of existing medical debt, there is “no impact of debt relief on credit access, utilization, and financial distress on average” and “no effect of medical debt relief on mental health on average.”

State Rep. Dan Caulkins, R-Decatur, said it may sound like a good idea, but the legislature must balance priorities especially as he said state agencies are requesting increased budgets across the board. He also warned, taxpayer subsidies to a nonprofit to liquidate select medical debt may not provide the benefits supporters are looking for.

“It does not solve your credit problems nor does it really address the mental health issues that we have,” Caulkins told The Center Square. “If the research is factual, the governor is trying to pander. I know he’s still interested in a political career outside of Illinois.”

Pritzker has denied he’s looking to run for president. On Monday, he downplayed the recent study as based on data from between 2018-2020.

“I think the results of that are not indicative of, for example, the research that’s been done since then,” Pritzker said.

Pritzker’s plan would have the state partner with Undue Medical Debt, formerly known as RIP Medical Debt, a national nonprofit. Pritzker said the deal will have one penny of taxpayer funds buy back and eliminate every one dollar of medical debt.

In a news release, Pritzker’s office said a $10 million investment from taxpayers could eliminate up to $1 billion in medical debt for 340,000 low-income Illinoisans in the first year.

Cook County has a similar programing ongoing, where officials say they’ve assisted over 200,000 residents to eliminate $350 million.

Loyola Medicine also recently announced they are forgiving over $112 million in medical debt for past and current patients, helping 60,000 Illinoisans.

Pritzker’s office said Undue Medical Debt would cover individuals four times or below the federal poverty level or those with medical debt at 5% their annual income.

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