If a slim, white envelope from Long Island City, N.Y., lands at your door or in your mailbox, don’t throw it away. It’s not junk, but quite possibly the best news all week.
More than 134,000 people across Los Angeles County are expected to receive a letter in the next week with the notice that their medical debt is paid and forgiven.
It’s the first wave of a county program put forward last year by the Los Angeles County Board of Supervisors to reduce medical debt by buying it.
“If you get a letter in the mail from LA County and Undue Medical Debt this week — open it,” said Supervisor Janice Hahn, who authored the motion to launch the program. “This is LA County government at its best. We are seizing an opportunity and making a smart financial decision to make people’s lives better.”
The pilot program, titled the Los Angeles County Medical Debt Relief Program, was launched in December 2024 to spend an initial $5 million in a planned agreement with national nonprofit Undue Medical Debt to relieve $500 million in medical debt for some of its poorest residents.
In its first iteration announced Thursday, the program used about $1 million to buy $183.5 million in unpaid medical expenses.
It follows a 2023 county report that found 810,000 county residents — roughly 1 in 10 adults — had racked up a cumulative amount of medical debt over $2.6 billion. (Updated numbers have shown an increase to $2.9 billion among 1 in 9 adults in LA County.) Statewide, about 36% of Californians owe medical expenses to a doctor’s office, a hospital, a collections agency or a credit card company, according to Hahn’s office.
These were bills incurred through unplanned hospital visits — trips to the emergency room, dentist office or clinic — where people, despite many of whom had insurance, were saddled with high out-of-pocket costs. The report found these were residents more likely to enter credit card debt, skip meals or prescription refills, and struggle to pay rent.
A disproportionate percentage were Black and Latino.
“Medical debt continues to be a significant burden for too many LA County residents, with the total debt estimated at over $2.9 billion in 2023 in LA County — a staggering amount that has not decreased despite gains in insurance coverage,” said Dr. Barbara Ferrer, Director of the Los Angeles County Department of Public Health.
Yet when hospitals can’t collect on the bill, they sell that debt to collectors for “pennies on the dollar,” said Supervisor Hahn in a press conference Thursday. These agencies will then try to collect the face-value amount from the debtor and pocket the profit.
The California Department of Public Health estimates it would cost $24 million to buy about $2 billion of medical debt. Following Undue Medical Debt’s model of buying discounted debt, the county can erase an average of $100 in debt for every dollar spent.
Supervisors hope that by shedding light on the issue — the discounted price to eliminate it — other nonprofits and charitable organizations will step in to buy and forgive more debt from collectors and hospitals.
“Medical debt should never stand between our residents and the care they need,” said Supervisor Holly Mitchell. “We are committed to tackling the root causes of medical debt, so no one has to choose between seeing a doctor or putting food on the table.”
Officials said the debt relief is bought at random from participating providers or collectors. Relief cannot be requested. To qualify for relief, current LA County residents must be at least four times below the federal poverty level or have medical debt that totals 5% or more of their annual income.
Also announced as part of the plan, the county public health department is bolstering its data gathering on how hospitals collect debt, with hopes to create an online portal where people can apply for financial assistance and legal aid.