LA County Grapples with Soaring Medical Debt: Exceeds $2.9 Billion in 2022, Intensifying Efforts to Bolster Financial Protections

The Los Angeles County Department of Public Health Jan. 31 released an update for its report, “Medical Debt in LA County: Baseline Report and Action Plan,” which found that total medical debt burden exceeds $2.9 billion with an approximate $300 million increase from 2021 to 2022.

Medical debt continues to affect about 1 in 10 adults in LA County in 2022, similar to the prevalence of major health conditions such as asthma and diabetes.

Insurance Expansion Failed to Curb Debt

With expanding insurance coverage and the Public Health Emergency protections for COVID-19, the percentage of uninsured residents dropped by approximately 13% from 2021 to 2022. However, during the same time period, medical debt still increased, indicating that insurance expansion, while important for healthcare access, has not fully addressed the underlying factors contributing to medical debt.

Mirroring trends observed during COVID-19, medical debt has disproportionately impacted vulnerable groups. Latino adults (12.0%), Black adults (11.0%), and American Indian/Alaskan Native, Native Hawaiian/Pacific Islander and multiracial adults (11.3%) were more burdened than White (8.2%) and Asian (6.5%) adults. Adults in households with incomes below the Federal Poverty Level or FPL (12.2%), from 100-199% FPL (13.3%), and from 200-299% FPL (13.0%), were more burdened by medical debt than those in households with incomes at 300% or more of the FPL (7.5%). In 2022, 300% of the federal poverty level for a family of four was $83,250.

Additionally, Medi-Cal recipients were approximately twice as likely to have medical debt than those on Medicare. More than 25% of uninsured adults experience medical debt and were over eight times more likely to be burdened by medical debt than those with Medicare.

Detrimental Effects on Health and Well-being

Medical debt remains a priority public health issue, as medical debt impedes patients’ ability to access necessary care and treatment, creating a cycle of health and financial hardship. Adults with medical debt were over three times more likely to skip or delay needed healthcare, and approximately three and a half times more likely to delay or not pick up prescriptions compared to those who were not burdened with medical debt. Additionally, adults with medical debt burden were almost two and a half times more likely to experience food insecurity and over three times more likely to experience housing instability.

Strengthening Protections for Health Care Consumers

During October 2023, the Board of Supervisors passed a motion recognizing the impact medical debt has on county residents that calls for Public Health, working with coalition members, to take actions to better understand the extent of medical debt challenges and design solutions to reduce financial hardships.

In response to the motion, Public Health will: 

Draft an ordinance to gather data on LA County hospital debt collection and financial assistance activities to highlight hospital best practices.

Collaborate with Consumer and Business Affairs to identify policies, practices and programs to prevent medical debt.

Work with the CEO to assess the feasibility for retiring medical debt with funding sources, whether government or philanthropic, similar to programs in Cook County Illinois and New York City.

And, in consultation with Public Health and partner county agencies, the CEO office of legislative affairs and intergovernmental relations will advocate for policy changes that will improve consumer protections and mitigate medical debt.

Details: http://publichealth.lacounty.gov/hccp/medicalDebt/