Board Approves Hahn-Mitchell Proposals to Reduce Medical Debt for Local Families

Los Angeles, CA – Today, the Los Angeles County Board of Supervisors unanimously approved a motion authored by Board Chair Janice Hahn and co-authored by Supervisor Holly Mitchell aimed at reducing the burden of medical debt on county residents. Strategies the County will pursue include requiring hospitals to share debt-collection and financial assistance data with the County and the public, new policies to reduce accumulation of debt, and exploring an innovative proposal to purchase residents’ debt for a small fraction of its value and retiring it.
“Medical debt is something that is largely out of people’s control, but it is devasting families here in LA County,” said Supervisor Janice Hahn. “It is contributing to poverty and homelessness and forcing too many people to delay medical care or avoid filling prescriptions. Helping families with the burden of medical debt would pay dividends.”
When families rack up medical debt, hospitals sell it for pennies on the dollar on a secondary market to companies that profit from collecting on that debt. In recent years, groups such as RIP Medical Debt have worked with other jurisdictions, such as Cook County, to purchase and retire medical debt for qualifying individuals from their local hospitals for a fraction of the value of the debt.
According to RIP Medical Debt, the retirement of $100 of medical debt costs an average of $1. The Department of Public Health estimates that an investment of $24 million could retire $2 billion in medical debt for LA County residents.
Through today’s motion, the Board will receive a report in 90 days on the feasibility of purchasing and retiring County residents’ medical debt as well as potential County, State, Federal, and philanthropic funding sources to support this endeavor.
“Far too many people in my district, particularly our essential workers, Black, Latinx, and low-income families with children, have been burdened by medical debt,” said Supervisor Holly Mitchell. “In the aftermath of the COVID-19 pandemic, we must continue to be creative in offering strategic and innovative solutions across our County departments. This motion brings us a significant step closer towards better understanding the full scale of this challenge and applying proven strategies that have been done in other counties to help prevent and relieve medical debt for our constituents.”
The motion passed today also directs the development of a new ordinance that will require hospitals within Los Angeles County to provide data related to debt-collection and financial assistance which will be shared publicly in a new online dashboard for patients. County departments will also study and recommend new policies and practices to reduce residents’ medical debt including improving access to financial and legal assistance.
Approximately one in ten County adults face burdensome medical debt, with the total amount of medical debt held by Los Angeles County residents estimated to be greater than $2.6 billion. This medical debt disproportionately affects lower-income residents and Latino, Black, and Native or mixed-race communities, families with children and those with chronic health conditions. According to a report by the LA County Department of Public Health, residents with medical debt are more likely to experience food insecurity and housing instability, with nearly half reporting inability to pay for necessities because of their medical bills.
“Medical debt prevents people from seeking medical care and prescriptions and contributes to food and housing insecurity,” said Western Center on Law and Poverty Executive Director Crystal Crawford and Senior Attorney Helen Tran in a letter of support for the motion. “These health and financial harms can be avoided and corrected with the right policies. That is why we support this motion and the County’s willingness to take affirmative steps to reduce medical debt at a population health level.”
“Medical debt remains a public health emergency in Los Angeles County and serves as a consequential deterrent and social determinant when it comes to patients seeking appropriate and timely medical care. The physicians on Los Angeles County stand in solidarity and support with the LA County Board of Supervisors, the Department of Public Health, and many others to address this crisis,” said Dr. Jerry P Abraham, President of the Los Angeles County Medical Association.
Read the full motion here: https://file.lacounty.gov/SDSInter/bos/supdocs/184546.pdf