Got medical debt? LA County may have just paid it off

If you have past due medical bills in Los Angeles County, keep an eye on your mailbox over the next week. The county’s first wave of medical debt payoffs has started.

Beginning May 19, notices will be mailed to nearly 135,000 residents who have had a bill abolished under the relief program. Since the debt is paid off for pennies on the dollar, just over $1 million in county funds will eliminate $183.5 million of debt, said Supervisor Janice Hahn.

About the payoffs

The payments come from the county’s medical debt relief program that launched last year with the nonprofit Undue Medical Debt.

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While selected residents don’t need to take any action to get the relief, the county wants to make sure people don’t accidentally toss out the notification or think it’s a scam.

“ This isn’t kind of an opt-in,” said Supervisor Holly Mitchell. “There’s no application. It is a real notification that we are taking care of your medical debt.”

The letter asks residents to confirm they’ve received it by following an included link online. And this will be the only notice you’ll receive — the county won’t call, text or email you about the relief.

If your debt is picked, you’ll get a letter in the mail from "L.A. County and Undue Medical Debt." The envelope will have the county seal on it. Inside, the letter will explain what debt was abolished and answer some common questions about the relief.

Here’s an example of what the English and Spanish letters will look like (see more languages here):

Medical debt is increasing

Medical debt is a leading cause of bankruptcy in the U.S. — and new data show the problem is significantly affecting Angelenos. Even though the number of people without insurance has gone down, medical debt went up.

As of 2023, nearly 882,000 adults in L.A. County — or about 1 in 9 residents — carry medical debt. That’s an uptick from 2022, according to the county health department. The debt burden on residents totals $2.9 billion.

More than half of adults incurred credit card debt to pay medical bills. The department says 45% of residents with past due medical bills were unable to afford basic necessities, and nearly three quarters skipped medical care.

Uninsured adults over 65 are also more than nine times more likely to  carry medical debt than someone with Medicare, said county health officer Dr. Muntu Davis.

How debts are picked

The county mostly functions as a funder. Undue Medical Debt buys and pays off the debts for pennies on the dollar from participating hospitals, physicians’ groups and other entities that own it and agree to share their data.

To qualify for selection, L.A. County residents must have a past due bill that’s not on a payment plan with a participating provider. You must also be in one of these two financial situations:

• You earn less than or equal to 400% of the federal poverty level (for a family of four, that’s $128,600)
• You owe the hospital 5% or more of your annual household income

The payments may not erase all of your medical debt. The initial participating hospitals were MLK Community Hospital and Adventist Health White Memorial Hospital.

The county’s goal is to knock down $500 million in medical debt with county funds, with plans to eliminate up to $2 billion with outside aid.

The program started with $5 million via carryover funding from the 2023 to 2024 fiscal year. Other medical organizations have since contributed.