LA County to eliminate $500 million in medical debt for thousands of residents

Due to a new pilot program, an estimated 150,000 residents across LA County will soon have their medical debt cleared, and thousands more will be notified in the coming month of similar news, officials announced Monday.

The Los Angeles County Department of Public Health launched its Medical Debt Relief Program, an initiative aimed to eliminate such debt that disproportionately affects vulnerable communities.

County officials said the program will initially eliminate $500 million in debt by using a $5 million investment to purchase medical debt for pennies on the dollar for low-income residents. The County Board of Supervisors approved the program earlier this year, which was spearheaded by Supervisors Janice Hahn and Holly Mitchell.

“No one should have to go into poverty to get the health care they need, and yet that’s exactly what’s happening,” Hahn said. “Medical debt is crushing families across our communities.”

She added that one in 10 adults, or approximately 785,000 residents, in the county are burdened with medical debt — exacerbating inequities and forcing families to make hard decisions between paying for medical care or food and housing.

“LA County is going to step in and buy much of that debt, and instead of sending a bill to the person — I love this part — we’re going to send a letter to our low-income residents letting them know that their medical debt has been eliminated,” Hahn said.

Residents who receive assistance from the program can expect a letter as early as January.

Designed by the Medical Debt Coalition, a multi-sector group, the program seeks to eliminate $2 billion in medical debt for LA County residents.

In support of this goal, LA Care Health Plan has contributed an additional $2 million, and the LA County Medical Association has provided another $1 million for the program, for a total of $8 million.

County officials expect the total investment to eliminate $800 million of medical debt for nearly 200,000 residents.

Initial participating hospitals include Martin Luther King Community Hospital and Adventist Health White Memorial Hospital, which will work with the national nonprofit organization, Undue Medical Debt, to retire qualifying medical debt and close accounts.

Qualifying medical debts are past due medical bills owed by Los Angeles County residents who earn up to 400% of the federal poverty level (FPL), according to the DPH. Residents with past due medical bills do not need to apply and will receive a letter from Los Angeles County and Undue Medical Debt notifying them that their debt has been fully canceled.

“We are deeply grateful to our many partners who share our commitment to tackling the devastating damage of medical debt,” said Barbara Ferrer, director of DPH. “Together, we are working to ensure that every resident has a fair and just opportunity to achieve and maintain good health.”

In 2022, medical debt in Los Angeles County exceeded $2.9 billion, an increase of $300 million from the previous year.

This burden is similar in prevalence to chronic diseases like type 2 diabetes and disproportionately impacts families with children, low-income households and communities of color, including Latinx, Black, American Indian and Pacific Islander residents.

Residents who receive a medical bill they can’t pay or did not expect can visit http://publichealth.lacounty.gov/hccp/medicalDebt/ for information and resources, including how to apply for free or discounted hospital services (charity care), legal advice & assistance, consumer counseling and tips for dealing with billing and collections.