Board Approves Proposals to Reduce Medical Debt for Local Families

LOS ANGELES —The Los Angeles County Board of Supervisors Oct. 3 unanimously approved a motion authored by Board Chair Janice Hahn and co-authored by Supervisor Holly Mitchell aimed at reducing the burden of medical debt on county residents. The county will pursue strategies including requiring hospitals to share debt-collection and financial assistance data with the county and the public, new policies to reduce accumulation of debt and exploring a proposal to purchase residents’ debt for a small fraction of its value and retiring it.  

When families rack up medical debt, hospitals sell it for pennies on the dollar on a secondary market to companies that profit from collecting on that debt. In recent years, groups such as RIP Medical Debt have worked with other jurisdictions, such as Cook County, to purchase and retire medical debt for qualifying individuals from their local hospitals for a fraction of the value of the debt.

According to RIP Medical Debt, the retirement of $100 of medical debt costs an average of $1. The Department of Public Health estimates that an investment of $24 million could retire $2 billion in medical debt for LA County residents.

Through today’s motion, the board will receive a report in 90 days on the feasibility of purchasing and retiring county residents’ medical debt as well as potential county, state, federal and philanthropic funding sources to support this endeavor.   

The motion passed today also directs the development of a new ordinance that will require hospitals within Los Angeles County to provide data related to debt-collection and financial assistance which will be shared publicly in a new online dashboard for patients. County departments will also study and recommend new policies and practices to reduce residents’ medical debt including improving access to financial and legal assistance.

Approximately one in ten county adults face burdensome medical debt, with the total amount of medical debt held by Los Angeles County residents estimated to be greater than $2.6 billion. 

Details: Motion: https://file.lacounty.gov/SDSInter/bos/supdocs/184546.pdf