Medical Debt Forgiveness Programs: What’s Real And How To Apply

The phrase “medical debt forgiveness” circulates widely, but what it refers to varies considerably from program to program. Some programs eliminate balances entirely for qualifying patients. Others reduce them by a percentage. Others are simply extended payment plans marketed with language that implies forgiveness but delivers none. Knowing which is which before you apply saves time and prevents you from making financial decisions based on a program that does not actually apply to your situation.

This guide covers the programs that actually exist, what they require to qualify, and how to apply for each.

Key Takeaways

• Nonprofit hospitals that receive federal tax exemptions are legally required to have written charity care programs under Section 501(r) of the Internal Revenue Code. Most patients eligible for these programs never ask.

• Charity care eligibility typically begins at incomes at or below 200% to 400% of the federal poverty level, depending on the hospital’s written policy.

• There is no federal government program that forgives private medical debt. Programs framed as “government medical debt forgiveness” for private hospital bills are not accurately described.

• Some states operate medical debt relief programs or have passed laws limiting collection practices and interest on medical debt.

• For combined medical and consumer debt above $25,000, forgiveness programs alone rarely address the full scope of the problem. Debt settlement reaches balances that charity care does not.

Hospital Charity Care: The Largest And Most Accessible Program

This is the most significant source of genuine medical debt forgiveness available to private patients.

Under Section 501(r) of the Internal Revenue Code, nonprofit hospitals that maintain federal tax-exempt status are required to:

• Maintain a written financial assistance policy (FAP)
• Make the FAP publicly available, including on the hospital’s website
• Apply the FAP to patients who qualify based on income
• Limit charges to patients who qualify for assistance

Each hospital sets its own income thresholds and assistance levels within the federal framework. Most use the federal poverty level (FPL) as the income benchmark:

• Full charity care (100% write-off): typically available to patients at or below 200% of the FPL
• Sliding-scale reduction: typically available to patients between 200% and 400% to 500% of the FPL, with the percentage of reduction decreasing as income increases

For a single person in 2025, 200% of the federal poverty level is approximately $30,120 in annual income. The threshold rises for larger households. The HHS poverty guidelines are updated annually and used by most hospital programs as the reference point.

For-profit hospitals are not subject to the same federal requirements, but many operate voluntary financial assistance programs. Ask directly whether one exists.

Nonprofit And State-Level Debt Relief Programs

Several nonprofit organizations and state-level initiatives have focused specifically on medical debt in recent years.

RIP Medical Debt. This nonprofit organization purchases medical debt portfolios from hospitals and providers at a fraction of face value and then forgives those balances entirely, notifying patients that their debt has been eliminated. Patients cannot apply to have their specific debt purchased. The organization identifies portfolios of patient debt that meet income or hardship criteria and acquires those portfolios for forgiveness. Whether your debt is affected depends on whether your provider participates and whether your account meets the criteria used to select portfolios.

State-level programs. Several states have enacted specific medical debt legislation or established relief programs. Colorado, Virginia, Maryland, and New York have passed laws in recent years affecting medical debt collection practices, interest charges, or credit reporting. Some states have funded programs to purchase and forgive medical debt for qualifying residents. The scope, eligibility, and availability of these programs vary significantly. Contact your state’s department of health or consumer protection office for current program information.

Community health centers and federally qualified health centers (FQHCs). For ongoing care rather than past debt, FQHCs offer services on a sliding-scale fee basis to patients regardless of ability to pay. They are not structured to forgive existing debt, but can reduce the accumulation of new medical bills. The Health Resources and Services Administration (HRSA) maintains a national directory.

ACA Marketplace And Medicaid Retroactive Coverage

If you incurred medical expenses while uninsured and subsequently qualify for Medicaid, retroactive Medicaid coverage may apply to bills incurred before your enrollment in some states. Medicaid rules on retroactive coverage vary by state and have been subject to legislative changes. Contact your state Medicaid office directly to determine whether retroactive coverage is available for your specific situation.

For marketplace coverage under the Affordable Care Act, coverage begins on the plan’s effective date. It does not apply retroactively to bills incurred before enrollment. However, qualifying for coverage resolves future bills and may help prevent additional medical debt from accumulating.

The HealthCare.gov enrollment portal and your state Medicaid office are the correct resources for coverage eligibility questions.

Federal Programs That Do Not Cover Private Medical Debt

A category of misleading marketing targets people searching for government medical debt forgiveness. Several things are worth making clear.

There is no federal program that forgives private medical bills incurred at hospitals or provider offices. The federal government does not purchase or cancel private medical debt on behalf of individuals. Programs described as “government medical debt forgiveness” for private hospital bills do not accurately represent what any federal program offers.

What does exist at the federal level:

• The ACA’s charity care requirements for nonprofit hospitals (described above)
• Medicaid, which pays for future covered care for eligible individuals and, in some states, retroactive care
• Medicare cost-sharing assistance programs (Medicare Savings Programs, Extra Help) for eligible Medicare beneficiaries
• The Veterans Administration (VA) healthcare system, which covers eligible veterans and has specific financial hardship provisions for VA-related medical debt

If you receive a call, email, or advertisement claiming to offer government medical debt forgiveness for private bills, treat it with significant skepticism. The Federal Trade Commission maintains guidance on identifying debt relief scams.

What Debt Forgiveness Does Not Cover

Charity care and forgiveness programs have meaningful limits that affect whether they solve your specific problem.

They apply primarily to hospital bills. Physician group bills, specialist fees billed separately, laboratory fees, radiology fees, and ambulance charges are often billed by separate entities with their own billing policies. Charity care through the hospital does not automatically extend to these related bills.

Income documentation is required. Most programs require tax returns, pay stubs, bank statements, or other income verification. Patients who cannot or choose not to provide documentation may not qualify, regardless of actual income.

They do not address debt that has already been sold to collectors. Once a hospital has sold your balance to a third-party debt buyer, the hospital’s charity care program no longer applies. The debt buyer purchased the account and owns the balance. Negotiating with a collector is a separate process from applying for charity care.

They rarely address a large combined debt. For people carrying significant medical debt alongside credit card balances, personal loans, or other unsecured debt, charity care on one hospital bill does not address the larger financial picture.

When Forgiveness Programs Do Not Go Far Enough

Charity care, nonprofits, and state programs address specific bills or accounts that meet defined criteria. 

For people whose medical debt is part of a larger pattern of unsecured debt, where combined balances across credit cards, medical bills, and personal loans have grown beyond what negotiation can resolve, structured debt resolution addresses the underlying problem.

Medical debt relief through Century’s program covers unsecured medical balances alongside other unsecured debt. The program works by directing monthly funds into a dedicated FDIC-insured account rather than to individual creditors. As funds accumulate, Century’s team negotiates with each creditor to accept a settlement for less than the full balance. You approve every offer before funds move. Fees are success-based and charged only after each individual settlement is reached, and you approve it.

For balances of $25,000 or more in combined unsecured debt, where charity care either does not apply or covers only a portion of the total, a free consultation with a Certified Debt Specialist gives you a specific picture of what resolution looks like for your accounts.

Debt settlement will negatively affect your credit during the program. Results vary based on individual circumstances and the creditors involved.

How To Apply: Step-by-Step

For hospital charity care:

1. Contact the hospital’s billing department or financial counseling office directly. Ask for the financial assistance coordinator.
2. Request a copy of the hospital’s written financial assistance policy.
3. Obtain and complete the financial assistance application.
4. Gather required documentation: most recent federal tax return, recent pay stubs (typically two to four weeks), and bank statements.
5. Submit the application before making any payment on the account. Some hospitals will not apply charity care retroactively.
6. Follow up within 30 days if you have not received a decision.
7. If denied, ask for the specific reason and whether an appeal process exists.

For state programs:

1. Contact your state’s department of health or consumer protection office to confirm whether a current program exists and whether you are within its service area.
2. Confirm eligibility criteria (income, debt type, debt age, provider type).
3. Follow the application process specific to that program.

For RIP Medical Debt: There is no application process. The organization identifies and purchases eligible debt portfolios based on its own criteria. You can check their website for information on which health systems or states they work with.

Also, read:

• Medical Debt Relief: Every Option for Reducing What You Owe

• How to Negotiate Medical Bills (Even If They’re Already in Collections)

• Does Medical Debt Affect Your Credit Score? The 2026 Answer

• Is Debt Settlement Right for You?

If Your Balance Is Beyond What Forgiveness Programs Cover

For combined unsecured debt above $10,000 that charity care or forgiveness programs do not fully address, a free consultation with a Certified Debt Specialist gives you a complete picture of what structured resolution looks like for your specific situation.

FAQ

Is there a government program that forgives medical debt?

There is no federal program that forgives private medical debt incurred at hospitals or physician offices. Federal requirements exist for nonprofit hospitals to offer charity care, and Medicaid covers eligible individuals’ future care. Marketing that claims otherwise is not accurately representing what any government program offers.

How do I qualify for hospital charity care?

Eligibility is determined by each hospital’s written financial assistance policy, which it is required to make public. Most programs use the federal poverty level as an income benchmark. Patients at or below 200% of the FPL typically qualify for the most assistance. You must apply with supporting income documentation. Contact the hospital’s billing or financial counseling department to start the process.

What happens to medical debt forgiven through charity care?

The hospital writes off the balance. You are not required to pay the forgiven amount. Under current IRS guidance, hospital charity care write-offs are generally not treated as taxable cancellation-of-debt income. Consult a tax professional for guidance specific to your situation.

Can charity care apply to a bill already in collections?

Not typically. Once a hospital sells your balance to a third-party debt buyer, the hospital’s charity care program no longer controls that account. You would need to negotiate directly with the collector. Some hospitals retain collection authority on certain accounts while applying charity care; ask the hospital directly about accounts still within their billing control.

Does applying for charity care hurt your credit?

No. Applying for a hospital’s financial assistance program does not involve a credit inquiry and does not affect your credit report.

Resources

• Internal Revenue Service: Section 501(r) Requirements for Nonprofit Hospitals — governing statute for hospital charity care obligations.
• HHS: Federal Poverty Guidelines — annual poverty level thresholds used by most charity care programs.
• HealthCare.gov: Medicaid and CHIP Coverage — information on Medicaid eligibility and enrollment.
• Health Resources and Services Administration: Find a Health Center — directory of federally qualified health centers offering sliding-scale services.
• RIP Medical Debt — a nonprofit that purchases and forgives medical debt for qualifying individuals.
• Federal Trade Commission: Medical Debt Scams — guidance on identifying fraudulent medical debt relief offers.
• Consumer Financial Protection Bureau: Medical Debt — research and policy guidance on medical debt burden.
• Century Support Services: Medical Debt Relief — Century’s program for unsecured medical debt resolution.