Medical Debt
Suzanne Potter, producer/reporter, California News Service, a bureau of Public News Service.
Christmas is coming early this year for some families in Los Angeles County. This week, letters are arriving in the mail letting them know their medical debt is being forgiven.
Starting last year, some $363 million in medical debt owed by 171,000 people has been permanently erased by the county’s Medical Debt Relief Program.
The nonprofit Undue Medical Debt, administers the program for the county. President and CEO Allison Sesso says the process is straightforward.
“There is no action an individual can take to buy this debt on their own, and there’s nothing anybody has to do to get this relief,” Sesso explained. “They just have to receive a letter and know that debt has been relieved, and they’re free and clear of it.”
The current round of debt relief will eliminate $180 million in debt held by 39,000 Los Angeles County residents.
Program requirements
To qualify, people’s income must be at or below 400% of the Federal Poverty Level. They may qualify as well if their medical debt equals 5% or more of their annual income.
Also, Sesso notes her organization is using $5 million in seed money from the county Department of Public Health to buy people’s debt.
“We buy medical debt, similar to a for-profit debt buyer,” Sesso outlined. “Medical debt can be bought for pennies on the dollar, so we’re able to take $1 and alleviate as much as $100, if not more, of medical debt. And so, that’s why we are able to do this amazing debt relief.”
Undue Medical Debt has more than 25 partnerships with state and local governments across the country. Sesso adds the nonprofit is also working with two other groups in California to raise money to reduce medical debt. The Global Shapers Los Angeles hub runs one, and students at California State University in San Marcos sponsors another.
