How LA County Plans To Wipe Out $800M In Medical Debt For 200K Angelenos

LOS ANGELES, CA — Over 150,000 Los Angeles County residents will soon have their medical debt cleared as part of a county program launched Tuesday that will buy low-income residents' medical debt for pennies on the dollar.

The Los Angeles County Department of Public Health's Medical Debt Relief Program will initially eliminate the medical debt of 150,000 Angelenos totaling $500 million. Thousands more residents will be eligible for the assistance in the coming months as officials expand the program, officials said.

Here's how it works: In partnership with the national nonprofit Undue Medical Debt, officials will pay off unpaid bills and other debts accrued by patients at certain participating local hospitals. The hospitals have agreed to settle the debts for much less than the principal amount — such that county officials estimate they'll be able to clear $500 million in debt for only $5 million.

"No one should have to go into poverty to get the health care they need, and yet that's exactly what's happening," county Supervisor Janice Hahn said. "Medical debt is crushing families across our communities."

Designed by the Medical Debt Coalition — which includes local government, health nonprofits and hospitals — the program aims to eventually eliminate $2 billion in medical debt for LA County residents.

Ten percent of adults in the county — 785,000 residents — are burdened by medical debt. In 2022, the total medical debt in the county exceeded $2.9 billion, an increase of $300 million from the year before, according to officials.

The Board of County Supervisors approved $5 million for the program earlier this year, which was spearheaded by supervisors Hahn and Holly Mitchell. That will cover $500 million in debt owed by 150,000 residents, officials said.

LA Care Health Plan contributed an additional $2 million to the cause, while the LA County Medical Association contributed $1 million, which will help pay off an additional $300 million owed by 50,000 people, officials said.

In total, officials estimate it would take $24 million to meet the county's goal of canceling $2 billion in medical debt, LAist reported.

Initial participating hospitals include Martin Luther King Community Hospital and Adventist Health White Memorial Hospital.

To qualify for the program, medical debts must be past-due bills owed by county residents who earn up to 400% of the federal poverty level. Residents won't need to do anything — they'll receive a letter from the county as early as January notifying them their debt has been fully canceled.

City News Service contributed to this report.