Minnesota lawmakers have introduced the Medical Debt Reset Act, setting aside $5 million to help the nonprofit Undue forgive up to $500 million in medical debt. The legislation aims to provide financial relief to Minnesotans with a household income at or below 400% of the Federal Poverty Guidelines, or those whose medical debt equals or exceeds 5% of their income. Undue has successfully managed similar debt relief efforts in New Jersey, Rhode Island, Arizona, Connecticut, Illinois and St. Paul.
Medical debt is a growing crisis in the U.S., disproportionately impacting lower-income families and communities of color. Rising health care costs have left many Americans struggling to pay for essential treatment, forcing them to make difficult financial decisions. The proposed act underscores the urgent need to address this burden, which can devastate credit scores, limit access to housing, and create lasting economic instability.
Jan Lillemo, a self-employed consultant, shared her family’s struggle with medical debt. She and her husband paid $150,000 out-of-pocket for their daughter’s lymphoma treatment. “We have put $21,000 on medical credit cards and struggle to make payments,” Lillemo told a crowd of supporters, many wearing blue shirts reading “Faith in Minnesota.”
The Lillemos, whose income fluctuates due to Jan’s self-employment, have refinanced their home, cashed out their retirement savings, and moved in with Jan’s parents to stay afloat. Their story reflects the sacrifices many families make to cover health care costs.
Hannah MacDougall, a University of Minnesota student and local advocacy group representative, highlighted the impact of medical debt on rural residents. “Our analysis showed that those most affected by health care affordability in Minnesota are people living just above the Federal Poverty Level, as well as Black and Hispanic residents,” MacDougall said.
One of the hardest-hit areas is Roseau County in northwestern Minnesota, where 8% of residents struggle with medical debt. According to Debt in America’s interactive map, rural counties acquire more medical debt than urban areas, despite urban areas often reflecting more diverse communities.
Limited access to health care, lower income levels, higher uninsured rates, health care system strain, and more facilitate these outcomes; but this does not mean urban areas are not also greatly affected. In Hennepin County, home to Minneapolis, 2.25% of residents have medical debt in collections. The median medical debt in collections for the county is $1,200.
Medical debt gained renewed attention following the tragic shooting of Brian Thompson, the former CEO of Minnetonka-based UnitedHealthcare. The incident sparked public outrage and reignited discussions on the high costs of medical care in America.
Alfred Babington-Johnson, a longtime advocate, linked the issue to the broader struggle for social justice, invoking Dr. Martin Luther King Jr.’s vision of the “beloved community.” Quoting King, he emphasized, “No one chooses to become desperately ill requiring extraordinarily expensive interventions. Furthermore, no one chooses to be buried in mountains of debt due to their medical care.”
St. Paul Mayor Melvin Carter underscored the moral responsibility to act. “Our faith should never allow us to be quiet,” he said, referencing St. Paul’s previous success in forgiving $40 million in medical debt for nearly 32,000 residents under the American Rescue Plan.
Jennifer Schultz, a health care advocate, urged lawmakers to support the initiative. “Nobody chooses to get sick and fall into medical debt,” she said.
While medical debt relief programs have gained widespread support, some experts question their long-term impact. A Stanford study examining Undue’s past efforts found that while debt forgiveness provided temporary relief and modestly improved credit access for some, it had no significant impact on financial outcomes overall.
The study concluded that “medical debt is a symptom, not an underlying cause” of financial instability, highlighting the need for systemic health care reforms.
The debate over medical debt continues to shape policy discussions in Minnesota and beyond. As lawmakers consider the Medical Debt Reset Act, the stories of affected families serve as a reminder of the human cost of an unaffordable health care system.
Clint Combs welcomes reader responses at ccombs@spokesman-recorder.com