Christmas is coming early this year for some families in Los Angeles County as letters arrive this week, letting people know their medical debt has been forgiven.
Some $363 million in medical debt, owed by 171,000 people, has been permanently erased since the county’s Medical Debt Relief Program began last year.
Allison Sesso, president and CEO of the nonprofit Undue Medical Debt, which is administering the program for the county, said 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.”
She pointed out the current round of debt relief will eliminate $180 million of debt held by 39,000 Los Angeles area residents. To qualify, people’s income must be at or below 400% of the Federal Poverty Level, or their medical debt must equal 5% or more of their annual income.
Sesso noted 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 added the nonprofit is also working with two other groups in California to raise money to reduce medical debt. One is run by the Global Shapers Los Angeles hub, and another is sponsored by students at California State University in San Marcos.
Written by Suzanne Potter.
