Los Angeles County Approves Medical Debt Aid for Residents

Molly Castle Work

LOS ANGELES — Los Angeles County supervisors voted unanimously Tuesday to purchase up and forgive hundreds of thousands of {dollars} in medical debt as a part of a comprehensive plan to deal with a $2.9 billion burden that weighs on virtually 800,000 residents.

The measure, authored by supervisors Janice Hahn and Holly Mitchell, allows the county to enter right into a pilot program with Undue Medical Debt, beforehand referred to as RIP Medical Debt, a nationwide group that relieves sufferers of what they owe by buying their medical debt for pennies on the greenback then retiring it.

“Medical debt is largely out of people’s control, but it is devastating families across L.A. County, especially for people living on the brink of poverty,” Hahn stated earlier than the vote. “Luckily for us, this is low-hanging fruit. I think we have a moral obligation to seize this opportunity.”

The debt buy measure is a component of a bigger county initiative that features efforts to forestall the debt from accumulating within the first place, equivalent to boosting hospital monetary help packages and monitoring hospital debt assortment practices.

The Hospital Association of Southern California raised objections to the county’s general plan in a letter to the Board of Supervisors, saying it unfairly singled out hospitals and citing a research that stated one-time debt aid packages did not improve affected person psychological well-being. The hospital affiliation declined to talk with KFF Health News additional in regards to the debt forgiveness pilot program.

Hahn’s workplace estimates the county’s $5 million public well being funding will assist 150,000 residents and remove $500 million in debt. The public well being division stated it hopes to launch the pilot within the coming months and supply Angelenos aid this yr. According to Mitchell’s employees, more cash could possibly be allotted sooner or later if the pilot goes properly.

Health care debt burdens 4 in 10 adults within the U.S., in keeping with a KFF Health News investigation, and disproportionately impacts folks of coloration, low-income folks, and households with youngsters. In January, LA County discovered such debt weighed on 785,000 adults in 2022 and at the very least doubled the likelihood that sufferers would delay or forgo well being care or prescriptions. The county labeled it a public well being difficulty on par with diabetes and bronchial asthma.

Los Angeles County is a part of a rising wave of native governments addressing medical debt. Cook County, house to Chicago, invested $12 million with Undue Medical Debt in 2022 to erase $1 billion in debt for its residents. In March, Arizona introduced it might commit up to $30 million to medical debt aid.

“This is not a miracle that’s going to relieve all of this burden,” stated Allison Sesso, CEO of Undue Medical Debt. “But it’s a worthwhile effort, given the amount of money and how relatively inexpensive it is to relieve a lot of these debts.”

While this system gives speedy aid, the county acknowledged it’s a short-term strategy that doesn’t stop residents from incurring extra debt sooner or later. Mona Shah of Community Catalyst, a nationwide well being fairness and coverage group, endorsed LA County’s strategy of pairing one-time debt forgiveness with different efforts to deal with the foundation causes of medical debt.

“We don’t want to ever deny that relief, but we really need to focus on preventing medical debt from happening in the first place,” Shah stated. “Otherwise, it just ends up being this vicious cycle where you’re relieved, and then the next day you can be back in the same situation again.”

Shah stated she additionally has issues that these packages let hospitals off the hook for the failures of their legally required monetary help packages for low-income sufferers. Nonprofit hospitals, that are exempt from most taxes, are required to supply charity care, and in California it’s required of all hospitals.

Undue Medical Debt usually companions with hospitals or doctor teams to determine individuals who make beneath 400% of the federal poverty line or whose debt is proven by hospital monetary information to be greater than 5% of their annual revenue. They then negotiate a purchase order worth, purchase the debt, and retire it.

Sesso thinks most of those sufferers would probably have been eligible for hospital monetary support within the first place. However, many sufferers don’t know these packages exist or are postpone by cumbersome approval processes.

Sesso stated her group makes use of affected person eligibility opinions as a chance to have interaction hospitals on how they might enhance their insurance policies.

Yolanda Vera, well being and wellness senior deputy in Mitchell’s workplace, stated the county understands {that a} one-time debt aid program isn’t a cure-all however sees worth in offering speedy aid.

“We have to try every tool we can to improve the economic well-being in our community,” Vera stated. “And this is one of them.”

This article was produced by KFF Health News, which publishes California Healthline, an editorially unbiased service of the California Health Care Foundation. 

KFF Health News is a nationwide newsroom that produces in-depth journalism about well being points and is among the core working packages at KFF—an unbiased supply of well being coverage analysis, polling, and journalism. Learn extra about KFF.


This story could be republished free of charge (details).

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