LA County will erase medical debt for 134K people. See if you qualify 

In the coming days, more than 134,000 people will get a letter that many people could only dream of: Their debt is being erased.

In this case, Los Angeles County will be confirming in a letter that medical debt for some LA County residents is wiped out with no strings attached.

Sounds good to be true? LA County Supervisors Janice Hahn and Holly Mitchell, who authored the proposal for the medical debt relief initiative, urged people to believe it. 

“How many of you are old enough to remember the old Publishers Clearing House commercial? You'd rush to your mailbox hoping to find an envelope and maybe you'd win a million dollars,” Hanh jokingly started her remarks during a news conference Thursday. “This envelope is going to be even better.

After the Board of Supervisors approved the medical debt relief initiative last year, the county will purchase medical debt from low-income residents with financial strains, primarily using contributions from charities and medical organizations.

Hahn said she and Mitchell decided to reverse-utilize the strategies by debt collectors, who buy medical debts for pennies on the dollars.

“We asked ourselves, ‘What if instead of collection agencies buying the debt, Los Angeles County bought that debt,’” Hahn described the brainstorming process for the program. "And what if instead of collecting it, we forgave it? That’s exactly what we’ve done.”

Those residents whose medical debt is being erased will receive a letter with an  LA County-branded envelope that reads Unique Medical Debt, said Mitchell.

“I don’t want people to confuse the word ‘undue’ with ‘overdue,’” Mitchell said. “I’m going to encourage people to open their mail. Far too many people get their mail and toss it aside.”

The medical debt program is an automatic pilot, which does not require qualifying residents to take any action, and no applications are accepted.

The qualified people must be residents of LA County, earning less than $128,00 for a family of four or having a medical bill that is 5% or more of their annual household income.

Those who meet the qualifications must also have a past due bill from a hospital or clinic participating in the debt relief program. They should not be using a payment plan to pay the bill. 

See more details on the medical debt relief program here.

The total amount of debt eliminated in the first round is estimated to be more than $183 million dollars, nearly one third of $500 million the county is aiming to erase.

After the program started with an initial $5 million investment by the county, officials are hoping to raise up to $2 billion through charitable contributions.

One in nine LA County residents is burdened by crippling medical debt, with over half of them having paid the medical bill with their credit cards, the county said.

Among those with medical debt, 45% report were unable to afford basic necessities, and 72% skipped needed medical care, the county's date noted.