Cook County Tried to Rid People of Medical Debt, but, for Many, Help Comes Too Late

COOK COUNTY — The day before Christmas eve in 2023, Andrew Ciaccio was up all night trying to soothe his stomach pains.

When he woke, he could barely sit up. Something was wrong.

"It was pretty intense," he recalled. "I was vomiting and really sweating and really feverish and just really in rough shape. [I] couldn't even put shoes on."

Panicked, his partner looked up the nearest hospital: Advocate Masonic Hospital.

Once Ciaccio got to the hospital, a new panic set in. What should he expect to pay for the surgery? Would the medical care be covered by his insurance? He and his partner didn't get any answers as forms were thrust upon him to sign to get him into an emergency appendectomy, a surgery that removes an inflamed appendix.

He asked multiple people for a good faith estimate but none could provide one.

Months later, he'd become one of hundreds of thousands of Cook County residents buried under medical debt. Ciaccio who earns between 60,000 and 70,000 a year is slowly paying off the more than $10,000 in medical bills that the hospital has moved to collections. It will take Ciaccio two to three years to pay it off, delaying his goals of saving for retirement and threatening his ability to rent an apartment and buy a car.

After a health care emergency in 2023, Andrew Ciaccio ended up with $10,000 dollars in medical bills. The debt, he says, is impacting his future.

His debt was not part of Cook County's medical debt buy program. But with his income level and the amount of his debt, he possibly could have qualified.

Since 2022, Cook County has spent more than $4 million to forgive nearly $500 million worth of medical debt for some 278,000 residents, becoming a pioneer among local governments and garnering waves of positive publicity for their efforts.

But an analysis of Cook County's debt relief accounts show that many people like Ciaccio saddled with debt should have qualified for free care, a sign that local hospitals are failing to screen for some of the region's poorest patients even as some use aggressive tactics to collect debt. And commercial insurance companies are shifting more and more costs onto patients, sinking them into debt.

The data from the Cook County Medical Debt Relief Initiative revealed that a significant number of people whose debts were forgiven through the program made less than 200% of the federal poverty level, a threshold that nearly every major hospital system in Cook County accepts for providing free care. Researchers say this indicates a common problem: patients are not getting the charity care they qualify for at hospitals, and health care policy efforts need to shift to make sure financial help is provided much earlier in the billing process.

Undue Medical Debt, the nonprofit contracted with Cook County to negotiate debt buys with health systems and collections agencies, said there are several reasons the majority of accounts forgiven are from people making below 200% of the federal poverty level. Some of it could be inadequate charity care assessment by providers and reluctance by patients to ask for help or fill out paperwork with their financial information, said Eva Stahl, the Vice President of Public Policy and Program Management at Undue Medical Debt.

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Patient income data is collected when the debt is bought. That could be years after a health crisis, and the health crisis itself may have sunk some people into a lower income bracket, according to Undue Medical Debt.

Data from three years of the county's debt relief program also reveals that insurance holders, like Ciaccio, make up the biggest share of debts forgiven, a sign that insurance coverage is often too thin to handle major medical needs.

Daniel Lempert, a spokesperson for Undue, said Medicaid makes up a small portion of the county's overall debt because the insurance requires little copayment. Medicare requires higher copayment, but not comparable to those required by commercial insurance and plans on the Affordable Care Act marketplace.

One accounting firm analyzed debt from nearly 1,500 hospitals across the country and found that debt from commercial insured accounts increased from 11.1% of total debt in 2018 to 57.6% in 2021.

"Patients are the collateral damage"

Commercial insurance plans have been shifting costs to patients for decades by increasing monthly premiums and making patients pay increasingly bigger shares of hospital bills. That means that more people making middle-class salaries need help paying for medical care.

The hospital and insurance industries have been pointing fingers at each other for years, blaming the other for saddling patients with crippling debt. Hospitals say insurance companies are covering less to pad profit margins and insurance companies say hospitals' massive bills forced them to shift costs to patients.

"There is this unsustainable lobby in this war back and forth between these two massive entities that make up a double digit chunk of the US economy. These are Goliaths and patients are the collateral damage," said Eli Rushbank, the director of policy advocacy at Dollar For, a nonprofit helping patients access charity care.

Sarah, for example, made about $70,000 a year as a grant writer when she was hospitalized in 2023, which would disqualify her from almost every financial aid and charity care program. Illinois Answers is using only her first name to protect her privacy.

But she was already under massive debt, from helping her family with rent, groceries and utility bills and after a drunk driver hit her car so badly she needed to buy a new one.

In an unfortunate twist, the stress of her debts triggered a mental health crisis that required a five day stay at the psychiatric wing of a hospital in December of 2023 that she could not afford.

"My insurance, BlueCross BlueShield PPO, I feel like that's one of the best you can get," she said. "I just didn't know the deductible would be so insane," she said, referring to the nearly $3,000 she owed for the five day stay. Insurance paid about $10,400, but she owed some $2,000 for the deductible, a $200 copay and another $700 in coinsurance, the billing split between patient and insurer.

"I just have anxiety now, like, even more anxiety than before," she said. "Am I gonna be able to pay this month? Are they gonna come after me?"

EXPLAINER: What is a deductible? Copay? Coinsurance?

Deductible is the amount the patient has to pay before insurance pays anything for hospital stays, tests and procedures.

Copay is what the patient has to pay each time they go to the doctor and sometimes emergency room.

Coinsurance, which is a somewhat more recent development, is the split between what the insurance pays and the patient pays. So if a patient has a 20% coinsurance, they'd have to pay $2,000 of a $10,000 bill in addition to the deductible.

Premium is the monthly cost of having insurance.

Sarah recently called the hospital pleading with them, but the most help they could offer was a payment plan, a couple hundred dollars a month for the next few years.

That means she doesn't go out to eat, can't go on dates or other social events.

"I can't remember the last time I bought a latte," she said.

The whole experience, including a hospital stay that she found unpleasant and traumatic, has made her scared of going back to an emergency room for care.

"I do not want to step foot in the hospital for as long as I can," she said.

"I'm trying to take as good care of myself as I possibly can. If I have to go to the hospital for any reason, I literally don't know what I would do."

The county's debt relief program, managed by the nonprofit Undue Medical Debt, buys up debt that's anywhere from 18 months to 7 or more years old. At that point, patients have likely suffered through aggressive collections tactics, experts say.

"I just have anxiety now, like, even more anxiety than before… Am I gonna be able to pay this month? Are they gonna come after me?"

Sarah

An Illinois Answers Project analysis of some of Cook County's largest hospital systems show that many of them use harmful tactics to force payment out of residents, some of whom are among the poorest in the county. Hospitals might deny medically necessary care, put a lien on homes, garnish wages or hire collections agencies that call and text threatening messages regularly.

Since the early 2000s, hospitals, especially nonprofit hospitals that have financial obligations to serve community needs, have come under pressure to reform collections policies as frustrated patients and advocate groups demand change.

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Advocate Masonic Hospital where Ciaccio and Sarah were admitted is in the middle of a multi-year effort to scale back harmful collections policy. Last year, Advocate announced it would cancel liens placed on homes and real estate as part of previous efforts to collect on debt. And in 2022, Advocate Health said it would stop reporting debts to credit agencies, make more people eligible for charity care and stop filing lawsuits and seeking liens as part of its collection efforts.

But that's not what happened for Ciaccio after his health crisis in 2023.

A few months after his procedure, once his bills were overdue, debt collectors threatened to send his bill to the credit agencies, which would have tanked his credit score. He was able to set up a monthly installment plan, but the process took a toll.

After a health care emergency in 2023, Andrew Ciaccio ended up with $10,000 dollars in medical bills. The debt, he says, is impacting his future.

"Every time I'd get a letter from them, I'd get this shock or adrenaline or cortisol or just feel fear," he said. "It's a scary interaction to have with them because they have all the cards and you're talking about a lot of money."

A representative for the hospital did not address the discrepancy but stressed that the hospital is "among the most generous in the country, offering full charity care to patients earning up to 300% of the federal poverty level and significant discounts for many others."

Relief, but too late

Medical debt relief is still a relatively new concept. Does it work?

That's what a group of researchers wanted to find out.

Of course, for individuals stressed over debt, the cancellation can be a huge relief.

But one of the first efforts to study the effectiveness of medical debt relief in 2024 revealed that its effectiveness is limited.

Researchers working with Undue Medical Debt found that relief programs are often too late to make a difference.

"We were studying debts forgiven at least a year and a half and sometimes up to seven years after the precipitating event. The debt has already been picked over by debt collectors," said Neale Mahoney, a Stanford University economics professor and co-author of the study. "People may have already been hardened to the debt collection process. If they get used to ignoring phone calls and letters, they're outside of the window for follow-up care."

That's why charitable organizations and nonprofits can buy older medical debt for a tiny fraction of the original bill: hospitals have largely given up on collecting older debts and efforts to get payments have already done their harm to the patients.

"It's the result of bad luck, not bad financial behavior, right… You choose to max out your credit card. You choose to buy a car. Most people don't choose to go to the ER."

Neale Mahoney, economics professor, Stanford University

"The advice I've given to policy makers, local and federal level, is that the research is starting to tell us that we want to pair downstream debt relief with intervention with medical debt closer to the source," he said.

Undue Medical Debt responded to the study's conclusions by noting that the organization has made a number of changes since 2018 to 2020, the years researchers examined the group's impact through buying up debt. Those changes include shifting eligibility to buy debt from higher-income families, erasing debt sooner and supporting financial counseling and insurance coverage navigation to prevent debt.

That could look like improving financial aid provided by hospitals at the front end so that patients won't have a medical debt burden or other policies aiming to curb harmful collections practices. In the last few years, Undue Medical Debt has been developing a policy advocacy operation to expand its debt relief platform beyond buying up debt.

"They faced some criticism, including from me, saying, focusing entirely on forgiving old medical debt might not really be the solution we think it is," said Dr. Luke Messac, a doctor and medical debt relief advocate. "It's really just bailing out debt collectors and hospitals that are particularly unforgiving and doing not as much as we'd hope for the patients."

One concrete benefit of debt relief, even in the late stages, is that credit scores can go up to allow people to rent better apartments and get better rates for big purchases.

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But legislators have also been making changes. In January, an Illinois law went into effect forbidding credit bureaus from factoring in medical debt in credit reports and scores.

That follows a policy shift among three major credit bureaus that erased medical debt under $500 from its reports in 2023.

Medical debt shouldn't be a measure of a person's ability to pay back loans because people often don't choose to need medical care, said Mahoney.

"It's the result of bad luck, not bad financial behavior, right?" he said. "You choose to max out your credit card. You choose to buy a car. Most people don't choose to go to the ER."

"People are falling through the cracks"

Shepard Searl took a job at Starbucks because they heard the company offered good health insurance.

But as their health deteriorated and monthly health insurance costs went up, it was harder to work the hours needed to cover the cost of managing multiple chronic illnesses.

After a few health emergencies, they went into debt.

"All of these things culminating went from [making debt] something that was manageable to a thing that was suffocating and really dictating every aspect of my life," they said. "A big chunk of my paycheck was immediately going to paying recurring fees."

Eventually, Searl had to take a leave of absence from work and their friends set up a GoFundMe to help them pay off medical expenses. Searl now qualifies for Medicaid.

Medicaid is only available to the people making some of the lowest incomes — about $26,650 for a family of three and about $15,650 for an individual. Those who make more, but still qualify for charity care, often slip through the cracks. About 2 in 3 people whose debts were forgiven were making less than 200% of the federal poverty level, or $31,000 a year, the level that would qualify them for these programs and help them avoid medical debt from the outset.

One study estimates that there's some $14 billion in undistributed charity care that ends up as debt, according to Dollar For, a nonprofit that helps people claim financial aid and charity care from hospitals.

"One thing to realize is that the system itself is broken," said Stahl.

"We are going to capture people that have gotten lost and fall through the cracks."

Dollar For found through a survey that more than half of the people eligible for financial assistance never apply, said Rushbanks. That's because the majority of those people didn't know they could get financial help and some were confused by the process.

By 2014, Illinois required every hospital to develop a policy that fast tracks certain groups of vulnerable and low-income patients for charity care without requiring them to apply for aid, including several mandatory categories like homelessness and those eligible for medicaid but uninsured when receiving care.

Hospitals in urban areas are also required to automatically provide aid for people whose incomes are below 200% of the federal poverty level or who are eligible for government assistance.

These policies are meant to prevent people who qualify for charity care from getting saddled with debt because they struggle to navigate the financial help application process. But the policies don't always work, Rushbanks said.

There's not always an enforcement mechanism. Sometimes patients are required to provide paperwork and documentation that they don't end up submitting. Other times hospitals may not have a good system for catching people who fit these categories.

And patients, like Searl and Ciaccio, say hospital staff didn't talk about financial aid until they explicitly asked them about it.

Prevention, not just relief

Once the debt goes into collections, the repeated texts and calls begin.

For Searl, the debt collector with Evanston Hospital was Harris and Harris.

"They would call multiple times a week, send texts multiple times a week, and email multiple times a week," Searl recalled. "If I answered, they'd try to get me to pay everything upfront. I would explain that I was on a payment plan but couldn't keep up with larger bills, and then it would be a back and forth until I got them off the line."

Endeavor Health, the parent company of Evanston Hospital, said they send statements over the course of 120 days before sending the debt to a collection agency and "ensure interactions are respectful and aligns with our values."

An Endeavor spokesperson also wrote in an email that the health system "proactively" screens patients for charity care eligibility and provides "free care based on a patient's income in relation to the federal poverty level."

Decades ago, hospitals would keep debt records without trying to collect them, said Messac. But several big changes at the federal level, after the creation of Medicaid and Medicare programs in 1965, heavily impacted the industry.

For one, hospitals pulled back on charity care, arguing that the most vulnerable people now have government insurance, he said.

The IRS then changed the standard for nonprofit hospitals – from a model of providing as much charity care as financially possible to a more vague standard of benefiting the community, said Messac.

"But it's kind of nebulous, and hospitals don't really lose tax exemption if they don't do enough," he said.

And as hospitals grow into billion-dollar regional health systems that compete for market dominance, many turned to aggressively pursuing debt to make up for Medicaid and Medicare, which typically reimburses less than private insurers.

Despite its limitations, Cook County's debt relief program has multiplied in other parts of the country: more than 20 government medical debt relief programs to be exact, according to Rachel Ruttenberg, deputy chief of staff for the Office of the Cook County Council President.

"We started a bit of a movement," said Ruttenberg.

But the program alone won't solve medical debt, she said. The ultimate goal is to have accessible and affordable health care for everyone.

"And it honestly allows us to continue talking about medical debt. We understand that this is not a strategy for solving medical debt, but instead, we want to eliminate as much medical debt as possible while continuing to bring attention to the serious issue of medical debt and just showcase how much of a financial burden it is on people," said Ruttenberg. "The real fix is to have universal health care coverage in this country."

There have been pockets of success throughout the country when it comes to debt collection reform.

Los Angeles County followed suit with its own medical debt relief program a few years after Cook County. But they don't just buy up debt.

The county also requires hospitals to disclose key data regarding financial assistance provided and debt collections efforts, including placing a lien on patient's property, seizing bank accounts, suing patients, garnishing wages or denying care due to debt.

Messac, a longtime advocate for regulating medical debt, also points to North Carolina as an example of successful government intervention.

There, Gov. Roy Cooper leveraged federal funding in exchange for nearly 100 hospitals wiping out billions of dollars of debt and adopting standards that allow more patients to get financial aid.

For Cook County, the lesson is likely the need for medical debt prevention in addition to debt relief, which she said is also critical, said Mara Heneghan, the former director of policy at the office of the Cook County president. She was part of the team that worked on the launch of the medical debt relief program.

"Ultimately, it's unsurprising that it's more helpful to cancel debt earlier on," she said.

"We need to think about prevention of medical debt, so we're not putting people in that position."

Rachel Heimann Mercader and Meredith Newman contributed to this story.

Assistance with this project was provided by KFF Health News, a program of KFF, a nonprofit health-policy research, polling and news organization.

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*This story has been updated to correct the years during which researchers examined Undue Medical Debt's impact. The correct span of the study was 2018 to 2020.

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