The most populous county in the United States, with nearly 10 million people, is now looking to buy out the medical debt for around 150,000 of its most struggling residents.
The Los Angeles County Board of Supervisors voted June 25 to set aside $5 million to partner with a national nonprofit called Undue Medical Debt to buy and erase hundreds of millions of dollars of debt. The program is expected to roll out in stages later this year.
Here’s how the pilot program operates: Medical debt is typically bundled and sold at steep discounts to companies that profit from collecting it. Undue Medical Debt will instead use donated money to purchase this discounted debt and cancel it.
The practice can erase an average of $100 in debt for every dollar spent, according to the statement.
“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,” said Ms. Hahn.
The nonprofit also collaborated with other local governments across the country, including Cook County, Ill., and Toledo, Ohio. Ms. Mitchell cited Cook County’s success in erasing $1 billion in medical debt for 73,000 residents using $12 million.
The supervisor said removing the burden of medical debt will be a relief to many.
“I can just, you know, imagine the relief that a medical debt program in L.A. County will provide for our residents, particularly when we recognize what role that debt plays in a person’s ability to maintain their housing or to afford to get housing in our current climate,” Ms. Mitchell said.
During the meeting, Barbara Ferrer, the county health department director, said residents typically carry medical debts ranging from $500 to $1 million. She said that an estimated 800,000 people in the county have medical debt, with a total of $2.9 billion owed in 2022. That’s nearly $4,000 each.
Details including timeline and eligibility criteria of the program will be decided in the coming months.
Once the pilot program is done, the county will determine its effectiveness and scalability for future programs, the statement said. The program is also part of a larger effort to ease county residents’ medical debt.
“I know this $5 million investment in buying down medical debt at a discount will not solve the entire problem, but it’s a step in the right direction,” said board chair Lindsey Horvath. “It’s critical we provide aid to our most vulnerable constituents to prevent further stress and deteriorated health, and together, we will tackle medical debt.”
