LA County to Launch Pilot Program to Eliminate Low-Income Residents’ Medical Debt

LOS ANGELES — The Los Angeles County Board of Supervisors June 25 approved a proposal by Supervisor Janice Hahn and co-authored by Supervisor Holly Mitchell which identifies funding to launch a pilot program to eliminate medical debt for some struggling LA County residents. The pilot program will use $5 million to eliminate hundreds of millions of dollars of debt. 

“No one should be driven into poverty because they got sick. But medical debt remains a huge problem in this country, and it can be devastating for families and their financial well-being,” said Supervisor Janice Hahn who has championed efforts to address medical debt for LA County residents. “Luckily for us, we have an opportunity to make a difference. We can purchase medical debt for cents on the dollar and eliminate this burden for tens of thousands of people for a small fraction of what they collectively owe. I think we have a moral obligation to seize this opportunity to help these LA County families.”

Medical debt is often bundled and sold at steep discounts to companies who profit off of collecting on that debt. Since 2014, the nonprofit Undue Medical Debt has leveraged donations to purchase medical debts much like a collection company would, but instead of trying to collect on the debt, they cancel the debt entirely. On average, $1 can purchase and eliminate $100 of medical debt.

Under the proposal, LA County will partner with Undue Medical Debt to launch a medical debt elimination pilot program specifically targeting lower income LA County residents. Public Health estimates that with the up to $5 million identified today for the pilot program, LA County could eliminate $500 million of medical debt for 150,000 lower-income residents.

In addition to identifying funding, the approved motion allows the Department of Public Health to enter into an agreement with Undue Medical Debt to design and execute the pilot program. Details regarding the pilot program, partnerships with the hospital association and other key stakeholders, and the timeline will be worked out and announced in the coming months. Once the medical debt pilot program is completed, the Department of Public Health will report back to the board on its effectiveness and potential scalability. 

Medical debt exceeds $2.9 billion for LA County residents, impacting one in ten adults in 2022 and disproportionately affecting families with children, lower-income, Latino, Black, American Indian, and Pacific Islander residents, and people with chronic health conditions. Medical debt has been shown to impede patients’ ability to access necessary healthcare and treatment, creating a cycle of health and financial hardship which affects employment stability, housing security, and overall quality of life.   

Read the full motion here: https://file.lacounty.gov/SDSInter/bos/supdocs/192686.pdf

Read the Department of Public Health’s Medical Debt in LA County 2023 report: http://publichealth.lacounty.gov/chie/reports/Medical_Debt_Report_English.pdf

Read the Department of Public Health’s Medical Debt in LA County 2024 update:

http://publichealth.lacounty.gov/hccp/docs/Medical_Debt_Update_Jan24_English.pdf