LA County to Wipe Out $800M in Medical Debt for 200K Residents: Here’s How It Works

LA County Launches Program to Cancel $800M in Medical Debt for 200K Angelenos

Los Angeles County is tackling medical debt head-on, offering relief to hundreds of thousands of residents burdened by unpaid bills. Through a groundbreaking initiative, the county plans to clear $800 million in medical debt for low-income residents, helping alleviate financial stress for families struggling to make ends meet.

How the Program Works

The Medical Debt Relief Program, launched by the LA County Department of Public Health, works in partnership with the national nonprofit Undue Medical Debt. Hospitals participating in the program agree to settle unpaid medical bills for just pennies on the dollar. This allows the county to eliminate $500 million in medical debt for only $5 million, benefiting 150,000 residents in its initial phase.

County officials aim to eventually wipe out $2 billion in medical debt for eligible residents. Here’s a breakdown of the program’s progress and funding:

• LA County Board of Supervisors approved an initial $5 million investment to eliminate $500 million in debt.
• LA Care Health Plan added $2 million, while the LA County Medical Association contributed $1 million. These funds will clear an additional $300 million for another 50,000 residents.

In total, clearing $2 billion in medical debt would require just $24 million in funding, a small price to pay for massive financial relief.

Who Qualifies?

To qualify for medical debt cancellation:

• Residents must earn up to 400% of the federal poverty level.
• Debts must be past due and related to participating hospitals. Initial participating hospitals include:
  • Martin Luther King Community Hospital
  • Adventist Health White Memorial Hospital

Eligible residents won’t need to apply or take any action. Those whose debts are canceled will receive a notification letter starting January.

The Need for Medical Debt Relief

Medical debt impacts 10% of LA County adults—about 785,000 people. In 2022, countywide medical debt totaled $2.9 billion, up $300 million from the previous year.

“No one should have to go into poverty to get the health care they need,” said LA County Supervisor Janice Hahn. “Medical debt is crushing families across our communities.”

This program, spearheaded by Supervisors Janice Hahn and Holly Mitchell, brings together hospitals, nonprofits, and government entities to address a growing crisis and help residents start anew.

A Model for the Nation

LA County’s innovative approach could serve as a model for other communities grappling with medical debt. With hospitals, local governments, and nonprofits working together, the program demonstrates that significant financial relief is achievable.