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More than 134,000 Los Angeles County residents began receiving notices in the mail this week informing them that their medical debt has been permanently canceled, marking the first wave of relief from the county's Medical Debt Relief Program. The initial round of notices eliminates $183 million in medical debt without requiring any action from recipients.
The program represents the county's response to a growing crisis affecting nearly 882,000 adults in L.A. County who carry medical debt totaling $2.9 billion as of 2023. The initiative was launched in December 2024 through a partnership between the county and Undue Medical Debt, a national nonprofit organization that purchases medical debt for pennies on the dollar and forgives it.
The L.A. County Board of Supervisors approved an initial $5 million investment for the program, with additional funding from L.A. Care Health Plan and the L.A. County Medical Association bringing the total to $8 million. The program aims to eliminate $500 million in medical debt initially, with plans to expand to $2 billion through additional contributions from philanthropic partners, hospitals, and health plans.
"Medical debt is largely out of people's control, but it is devastating families across L.A.," said Supervisor Janice Hahn, who authored the motion to launch the program. The county's approach differs from traditional debt relief programs because residents cannot apply for assistance. Instead, Undue Medical Debt analyzes debt portfolios from participating hospitals to identify qualifying accounts automatically.
To qualify for debt relief, residents must be L.A. County residents earning no more than 400% of the federal poverty level or have medical bills exceeding 5% of their annual household income. For 2025, 400% of the federal poverty level equals $128,600 for a family of four. The debt must be past due from a participating provider and not currently under a payment plan.
Medical debt has widespread and lasting effects beyond immediate financial hardship. Research shows adults with medical debt are two to three times more likely to experience food insecurity, delay necessary medical care or prescriptions, and face housing instability compared to those without such burdens. Additionally, about half of adults facing medical debt take on credit card debt to pay their medical bills.
A Kaiser Family Foundation survey found four in ten U.S. adults owe medical or dental bills, with many using credit cards, loans, or borrowing from family to cover expenses. Most respondents made sacrifices, including cutting household spending, using savings, postponing medical care or prescriptions, and delaying education or housing decisions.
Additional research indicates that unsecured debt contributes to stress, anxiety, depression, and high blood pressure among individuals and families. The health impacts extend to those with medical debt being more likely to forgo follow‑up care, skip prescriptions and make difficult budgetary decisions.
The long-term effects on families include damaged credit scores that persist for seven years, reduced access to lines of credit, and greater difficulty obtaining housing. Studies indicate 57% of people with medical debt cut back on spending for food, clothing, and basic household items, while 48% exhaust their savings to pay medical bills.
One study found individuals with debt were up to three times more likely to face eviction or foreclosure and struggle to purchase necessities. A separate report showed 32% of respondents reported increased depression or anxiety due to medical debt, while nearly half felt trapped by their obligations.
The Undue Medical Debt program operates differently from traditional debt relief options. Unlike conventional debt settlement companies that typically require debtors to pay fees and negotiate payment plans, the Undue program provides complete debt forgiveness at no cost to recipients. The debt relief does not count as taxable income because it qualifies as a charitable gift from a detached third party.
Traditional debt relief programs often require lengthy applications, credit counseling sessions, and partial payments over time. In contrast, Undue Medical Debt leverages donations to purchase large bundled medical debts at steep discounts, providing immediate relief to financially vulnerable families without requiring any action from beneficiaries.
Initial participating hospitals include Martin Luther King Jr. Community Hospital and Adventist Health White Memorial Hospital. County supervisors are actively encouraging other debt holders to join the program.
For residents whose hospitals or clinics are not participating in the Undue Medical Debt program, multiple resources remain available. L.A. County Department of Public Health maintains a comprehensive list of support services for medical debt assistance. All hospitals are required to offer discounts or bill forgiveness based on income, and residents can contact hospitals directly to inquire about financial assistance programs.
Dollar For, a nonprofit organization, helps patients navigate and apply for hospital financial assistance programs. Legal aid organizations provide free services related to medical debt, including Neighborhood Legal Services of L.A. County and Public Counsel, which offers assistance with collections, lawsuits, and wrongful wage garnishment.
The L.A. County Department of Consumer and Business Affairs offers counseling and complaint resolution services for medical debt issues. The California Department of Managed Health Care assists with billing disputes and insurance concerns, while the California Department of Health Care Access and Information operates a Hospital Bill Complaint Program for violations of charity care or debt collection rules.
Recipients of debt relief letters should verify their authenticity by looking for the county seal on the envelope and official letterhead from L.A. County and Undue Medical Debt. The county warns residents to beware of scammers who may contact them via text, phone call, or email requesting information or payment. Legitimate debt relief notifications will only arrive by mail.
The program represents part of a broader strategy that includes legislative advocacy, data collection, improved financial assistance programs, and expanded consumer resources. Medical debt disproportionately impacts families with children, low-income households, and communities of color, including Latino, Black, American Indian, and Pacific Islander residents.
"We have to try every tool we can to improve the economic well-being in our community," said Yolanda Vera, health and wellness senior deputy in Supervisor Mitchell's office.
As the program continues, additional waves of letters will be sent to qualifying residents over the coming months.
