LA County aims to eliminate medical debt for 150,000 residents

Thirty-six percent of California residents have medical debt, whether with a doctor’s office, a hospital, a collection agency or a credit card company. This financial burden can cause people to delay or forego necessary medical care.

Los Angeles County just took a step to change that.

The county, by far the most populous in the country with nearly 10 million residents, plans to buy up some of its poorest residents and forgive their medical debt. The county Board of Supervisors voted this week to spend $5 million in a partnership with Undue Medical Debt, a national nonprofit. The program is expected to launch later this year.

“No one should have to end up in poverty because they got sick,” Janice Hahn, a member of the board of trustees, said in a statement. She added that she believed LA County had a “moral obligation” to help families in debt.

The county joins a growing list of places with similar forgiveness programs, including the state ArizonaNew York City, New Orleans, and Washington, DC

Los Angeles County residents had a total medical debt of $2.9 billion in 2022, the most recent year for which data is available.

Typically, hospitals with unpaid patient bills sell the debt at a discount to collection agencies, who attempt to recoup the money for profit. In contrast, when Unnecessary Medical Debt buys unpaid bills, the debt is forgiven entirely.

The nonprofit says that for every dollar donated to the group, it can forgive an average of $100 in face value of debt. LA County officials say the $5 million invested by the county could allow the group to erase $500 million in residents’ medical debt and help 150,000 Angelenos completely erase what they owe. (About 800,000 county residents have medical debt.)

There’s not a lot of research on how medical debt relief affects people. One of the first studies on the topic, published in April as a working paper by the National Bureau of Economic Research, found that medical debt relief didn’t improve debtors’ mental health or credit scores on average, my colleague Sarah Kliff wrote.

That could be because the people getting the relief also have so many other unpaid bills that clearing one bill won’t make a significant difference. Or it could be because the major credit reporting agencies removed unpaid medical debts less than $500 from credit reports last year, so relief from those debts would have little impact. (The Biden administration proposed rules that would completely remove medical bills from credit reports.)

When the study was published, Undue Medical Debt Executive Director Allison Sesso said the research contradicted what the nonprofit had heard directly from people it had helped. And she said the organization’s approach has changed since the study’s experiment ended in 2020. She has started buying debt directly from hospitals, rather than from collection agencies, she said, so the debt will be erased sooner, before it goes negative for long periods of time. influence.

LA County officials said the partnership with the nonprofit was part of a larger strategy to address medical debt. They said they plan to work with health insurers and hospitals to understand how they charge patients and calculate debts. And they plan to offer comprehensive legal aid services to residents and make it easier for people to apply for financial assistance through the province.

“We don’t want to come back to you in five years to try to pay off your medical debt,” LA County Public Health Director Barbara Ferrer said at this week’s Board of Supervisors meeting. “We want to pay it off and then we want to move on — without people who don’t have economic resources continuing to accumulate this level of debt.”

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Thanks for reading. I’ll be back on Monday. Enjoy your weekend. — Soumya

PS Here it is Today’s mini crossword.

Halina Bennet And Briana Scalia contributed to California Today. You can reach the team at

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