HB5290 Summary

• Establishes the Medical Debt Relief Pilot Program under the Department of Healthcare and Family Services to discharge medical debt for eligible Illinois residents with household income at or below 400% of federal poverty guidelines or medical debt equal to 5% or more of household income.

• Provides grant funding to a nonprofit medical debt relief coordinator to negotiate, acquire, and settle medical debt with hospitals and healthcare providers, with priority given to safety-net hospitals and providers serving disproportionately impacted areas.

• Requires the Department to notify eligible residents within 60 days when their medical debt has been discharged and prohibits the nonprofit coordinator from seeking payment from residents for purchased debt.

• Creates the Medical Debt Relief Pilot Program Fund and adds an income tax subtraction (Section 203(a)(2)(LL)) for eligible residents receiving medical debt relief to prevent it from being treated as taxable income.

• Pilot program must be established by January 1, 2025, with annual reporting to the Governor and General Assembly on amounts of debt purchased and discharged, number of residents assisted, and demographic characteristics of recipients; program sunsets July 1, 2029.