Medical Debt Forgiveness Programs What Exists and Where to Start (2026)

Search for medical debt forgiveness and you get two kinds of results: advertisements for "relief programs" that want your phone number, and vague advice to ask about charity care. Neither tells you which programs are real, who gets in, or what to do with the bill on your table.

This guide does: the four kinds of forgiveness that exist in 2026, with rules and numbers from the agencies and organizations that run them, what "medical debt relief" companies actually sell, and the order to try things in. The companion piece is what to do when you cannot pay a medical bill.

The short answer

Real forgiveness comes from four places, none of them a company that calls you, and only one takes applications.

The forgiveness programs that actually exist

Nonprofit hospital financial assistance

Section 501(r) of the tax code binds every hospital with a charitable tax exemption, and three of its rules are about your bill.

A written policy that covers your care. Section 501(r)(4) requires a written financial assistance policy for all emergency and other medically necessary care, stating who qualifies, whether the help is free or discounted care, how to apply and what happens if you do not pay, and the hospital must widely publicize it.

A cap on charges. Under 501(r)(5), someone who qualifies cannot be charged more for that care than the amounts the hospital generally bills people with insurance.

No collection until the hospital has checked. Under 501(r)(6), before selling your debt, reporting it to a credit bureau, suing, or denying care over an old balance, the hospital must make reasonable efforts to find out whether you qualify: no such action for at least 120 days from the first post-discharge statement, 30 days' written notice, and a 240-day application window. Qualify inside that window and the hospital must refund what you overpaid and reverse any collection action it took.

It is the biggest forgiveness program in the country and the most underused. In KFF's summary of charity care, nonprofit hospitals themselves estimated that about $2.7 billion of the bad debt they reported in 2019 came from people who were likely eligible but did not receive it, and by the count KFF cites only 13 states require hospitals to screen for eligibility. Income limits are often higher than people assume, so start with whether you qualify, then how to apply, or run the free charity care checker.

Undue Medical Debt

Undue Medical Debt, formerly RIP Medical Debt, is the nonprofit behind most of the "debt erased" headlines. It uses donations to buy large bundled portfolios of medical debt at steep discounts from hospitals, physician groups and collection agencies, then cancels every account in the bundle. Partners pre-qualify the accounts with one test: income at or below 400% of the federal poverty level, or medical debt of 5% or more of annual income.

You cannot apply. Undue's FAQ says it cannot relieve debt by individual request, because it buys portfolios to help thousands of people at once and can only erase debts that providers are willing to sell. If your account is in a bundle, a letter arrives in an Undue-branded envelope. Undue treats the relief as a gift, says it does not count as income, and will not file a Form 1099-C. In 2026 the 400% line is $63,840 for one person and $132,000 for a family of four, using the HHS guidelines for the 48 contiguous states.

State and local relief programs

Undue lists almost 20 state and local government partners, including Arizona, Michigan, New York, Rhode Island and Vermont, and cities from New York City to Pittsburgh, St. Paul and Toledo. We verified each program below on the government's own page on 28 August 2026. All use the 400% or 5% test unless noted, none takes applications, and all notify by letter.

North Carolina's is different: it changes hospital behavior. To receive enhanced Medicaid payments, hospitals had to relieve existing debt for people on Medicaid, with income at or below 350% of the poverty level, or with debt to that hospital above 5% of income, and adopt new policies: automatic discounts at or below 300% of the poverty level, no selling of those people's debt to collectors, interest capped at 3%, and no credit reporting of medical debt. The state reports that all 99 acute care hospitals signed on.

Everywhere else, treat these programs as a bonus, not a plan: the money is one-time, the partners choose the accounts, and if no letter comes the bill is still yours.

Medicaid can pay a bill you already have

Federal regulation lets Medicaid pay for care you already received: a state must make eligibility effective no later than the third month before the month you applied, if you received covered services in that period and would have been eligible then. A hospital bill from May can be covered by an application filed in August, and hospitals that sign up as qualified hospitals can make a presumptive eligibility decision on preliminary information, so ask the financial counselor to screen you for Medicaid too.

Two caveats. Some states hold federal waivers that shorten or remove the look-back; MACPAC counted 30 such demonstrations in 27 states in 2019. And the 2025 reconciliation law shortens the federal default for applications made on or after 1 January 2027, to one month for adults in the expansion group and two months for everyone else, so applying in 2026 keeps the three-month rule. HealthCare.gov lists free local help with the application.

What does not exist

There is no federal program that cancels medical debt because you ask. The CFPB rule people remember from January 2025 was about credit reports, not the debt itself, and a federal court vacated it on 11 July 2025 anyway. Undue cannot take requests, and none of the government programs above takes applications. Anyone offering to "enroll" you in a government forgiveness program, for a fee or otherwise, is describing something that does not exist.

What medical debt relief companies really do

The FTC has a plainer name for what these companies sell: debt settlement. A for-profit company negotiates with your creditors to let you pay a lump sum that is less than you owe, and most programs ask you to stop paying and deposit money into a dedicated account until there is enough for an offer. The FTC lists what can go wrong: creditors may refuse, collection calls and lawsuits may continue, late fees and interest build up, your credit is damaged, and many people never finish.

For a medical bill, the "stop paying" step is the problem. Delinquency is what turns a bill into a collection account, and the months spent saving for an offer are the months in which a nonprofit hospital's 240-day assistance window opens and closes. Settlement is a tool for old, verified debt, not for last month's bill.

Under the FTC's Telemarketing Sales Rule, a company that sells debt relief by phone, including when you call the number in its advertisement, cannot collect any fee until it has settled or changed the terms of at least one of your debts, you and the creditor have an agreement, and you have made at least one payment under it. In the FTC's words, it is illegal to front-load fees.

Settlement fits an old, verified balance in collections that the provider will not discount and that you can pay in a lump sum, and you can usually do it yourself: settling a medical bill for less walks through it. For several debts, nonprofit credit counseling through an agency on the US Trustee Program's approved list is the free alternative.

Negotiation vs relief: which fits your situation

Negotiation works on the bill while the provider still owns it; relief works on the debt after the provider has given up on it.

Two rows have their own guides: your rights when a medical bill is in collections and how medical debt affects your credit score. The credit row rests on the bureaus' voluntary policy, not a law: since 2023 Equifax, Experian and TransUnion have removed paid medical collections, stopped showing collections under $500, and waited a year from the date of care before one can appear. Bankruptcy is last because it requires counseling from an approved agency, stays on your credit report for up to ten years, and needs a lawyer.

The order that works

Each step below either lowers the number or confirms it, and each is cheaper than the one after it.

1. Verify the bill. Ask for the itemized bill and compare it with the explanation of benefits if you have insurance. Duplicate charges, wrong codes and services you did not receive are corrected, not negotiated. Here is how to request one.

2. Apply for financial assistance. At a nonprofit hospital the window is 240 days from the first statement. Apply even if you think you earn too much; the hospital decides, not the person at the desk.

3. Ask for the cash price. If you have no insurance, or the plan did not cover the visit, every hospital must publish a discounted cash price for each service. Ask for it on every line, in writing; the self-pay discount guide has the script.

4. Negotiate what is left. The billing office can still reduce a balance it owns. How to negotiate a hospital bill covers the calls and these scripts cover them word for word. If you would rather not make them, mediloop is a medical bill review and negotiation service: you upload the bill or EOB, a dedicated case specialist reviews the charges and deals with the provider's billing office, for a flat $129 per bill, refunded if the bill does not come down.

5. Set up a payment plan. Ask for the hospital's own plan, interest-free and in writing, before you accept financing offered at the desk. Medical bill payment plans explains what to ask for.

6. Settle, only for an old balance. If a verified debt is already in collections and steps 2 through 5 are exhausted, a lump-sum settlement for less than the balance is a legitimate ending, and a paid medical collection comes off your credit report. Not sure which step you are on? The free Medical Bill Relief Check sorts it out.

Red flags

Any fee before a debt is settled, or a guarantee before anyone has seen your bill. For debt relief sold by phone, upfront fees are illegal under the Telemarketing Sales Rule and the FTC names them as the first sign of a scam; it also bars unsubstantiated claims about results.

"Stop paying and stop talking to the hospital." Cutting off creditors without explaining the collection, lawsuit and credit consequences is on the FTC's warning list, and for a fresh medical bill it throws away the 240-day window.

A text, call or email saying your debt was forgiven and asking for details or a fee. Undue and its partners notify by letter and never collect; Los Angeles County's page says it plainly: a text, phone call or email is a scam.

A collector who will not send validation information, or anyone who says medical debt expires after seven years. Validation is required in or shortly after the first contact, with 30 days to dispute in writing. The credit report entry expires after seven years; the debt does not, and a partial payment on an old debt can restart the clock on a lawsuit in some states.

Frequently asked questions

Is there a program that pays off medical debt?

Not on request. There is no federal program that cancels medical debt because you ask. The programs that do exist work differently: nonprofit hospitals must offer financial assistance on emergency and medically necessary care and accept applications for 240 days after the first bill; Undue Medical Debt and the state and county programs that fund it buy bundled portfolios of old debt and cancel it, with no application and a letter if you were included; and Medicaid can pay bills from up to three months before the month you apply, for applications made in 2026. Anyone offering to enroll you in a government forgiveness program for a fee is describing something that does not exist.

How do I qualify for medical debt forgiveness?

It depends on the program. Hospital financial assistance uses each hospital's own income tiers, which are often higher than people expect, and you qualify by applying with proof of income. Undue Medical Debt and its government partners use one test: household income at or below 400% of the federal poverty level, which is $63,840 for one person and $132,000 for a family of four in 2026, or medical debt above 5% of income. You cannot apply for that relief; partners pre-qualify the accounts and you are told by letter. Medicaid uses your state's income limits, and coverage can reach back three months for applications made in 2026.

Can hospitals forgive medical debt?

Yes, and nonprofit hospitals are required to have a written policy for doing it. Under section 501(r) of the tax code the policy must cover emergency and medically necessary care, say who qualifies and whether the help is free or discounted care, and be widely publicized. Someone who qualifies cannot be charged more than the amounts the hospital generally bills people with insurance. The hospital cannot sell the debt, report it to a credit bureau or sue for at least 120 days after the first bill, and if you apply within 240 days and qualify it has to refund what you overpaid and reverse collection actions it already took. For-profit hospitals are not bound by 501(r), but many have hardship programs of their own, so ask.

Does Undue Medical Debt take applications?

No. Undue says it cannot relieve debt by individual request, because it buys large bundled portfolios of debt from hospitals, physician groups and collection agencies and can only cancel what those providers are willing to sell. If your account is in a portfolio, you get a letter in an Undue-branded envelope, sometimes with a state or county seal. Undue never collects on the debt it buys, the relief is treated as a gift, and Undue says it will not file a Form 1099-C. A text, call or email claiming to be from a debt relief program is a scam.

Is medical debt relief legit?

The nonprofit and government programs are. Commercial medical debt relief is debt settlement: a for-profit company asks you to stop paying, save into a dedicated account, and then offers your creditors a lump sum for less than you owe. It is legal but regulated. Under the FTC's Telemarketing Sales Rule a company that sells debt relief by phone cannot collect any fee until it has settled at least one debt, you have agreed to the deal and you have made a payment under it. The FTC warns that creditors can refuse, collection calls and lawsuits can continue, fees and interest build up, your credit is damaged and many people never finish. For a medical bill, those are the harms negotiating early avoids.

Can I negotiate medical debt in collections?

Yes. The collector must send validation information, including an itemized amount and the name of the original creditor, and you have 30 days to dispute it in writing, which pauses collection until it is verified. If the original provider was a nonprofit hospital and you are within 240 days of the first bill, apply for financial assistance: if you qualify, the hospital must reverse the collection action. If the debt is real and outside that window, negotiate a reduced lump sum with the collector and get the agreement in writing before paying. Under the credit bureaus' voluntary policy a paid medical collection is removed from your credit report. The full playbook is in your rights when a medical bill is in collections.

Does medical debt get forgiven after 7 years?

No. Two different clocks get confused here. A collection account can generally stay on your credit report for seven years, after which it comes off, but the debt itself does not expire. Separately, each state sets a statute of limitations, most often three to six years, after which a collector cannot sue you, though in most states it can still ask you to pay. Making a partial payment or acknowledging an old debt in writing may restart that clock in some states, so get advice before you respond to a collector about a debt that is several years old. See the statute of limitations on medical bills for the state-by-state picture.

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