The Los Angeles County Board of Supervisors unanimously approved a motion on Tuesday aimed at reducing the burden of medical debt for county residents. The proposal, authored by Board Chair Janice Hahn and co-authored by Supervisor Holly Mitchell, includes strategies requiring hospitals to share debt-collection and financial assistance data with the County and the public, new policies to reduce the 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 devastating 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.
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 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 an inability to pay for necessities because of their medical bills.
“Medical debt remains a public health emergency in Los Angeles County and serves as a consequential deterrent and social and economic determinant when it comes to patients seeking appropriate and timely medical care, including preventative and public health services. We applaud the county for taking a look at how we better utilize hospital community benefits dollars to ensure that they are truly invested in improving the health of our patients and the public and addressing the medical debt epidemic destroying lives and families in Los Angeles County,” said Dr. Jerry P. Abraham, President of the Los Angeles County Medical Association in oral testimony before the Board.
“On behalf of the Los Angeles County Medical Association (LACMA), our nearly 7,000 members, board of directors, and network of partners, I would like to commend Supervisor Janice Hahn for her leadership in addressing a crisis our most vulnerable families, medical debt and for the Los Angeles County Board of Supervisors for your unanimous and historic vote to address medical debt in our County,” Dr. Abraham wrote in a letter to the Board of supervisors in response to the proposal’s approval.
“And, I’d like to commend our colleagues with the Los Angeles County Department of Public Health, more specifically Dr. Barbara Ferrer, Dr. Muntu Davis and Dr. Naman Shah for their steadfast commitment to finding a solution as LACMA is “all in” when it comes to helping families cope with staggering healthcare costs while facing a medical crisis.
“LACMA stands with the Board of Supervisors and the Department of Public Health on this issue, and we will continue to support similar proposals that directly impact families. Today’s vulnerable populations face a multitude of challenges, including economic, housing, health, and transportation insecurities. For these reasons LACMA unequivocally supports the mission of the Los Angeles County Department of Public Health and the difference it makes for communities at risk.”