Gabrielle Russon
About 310,000 Orange County residents are getting surprise letters in the mail this week notifying them that their often sizable medical debt is suddenly gone.
Who paid the bills?
Orange County government picked up the tab for $473 million worth of unpaid medical bills that had been sold for pennies on the dollar and cost $3 million to erase.
Orange County is one of several governments, from Flint, Michigan to the entire state of Connecticut, to use federal stimulus funds to cover patients’ outstanding health care debt. The county has been working with a nonprofit paying off billions of dollars of unpaid medical bills across the U.S.
“This program is the latest countywide effort to improve the quality of life for our residents,” Orange County Mayor Jerry Demings said in a statement this week.
The Orange County residents who are being helped hadn’t applied for any program, although they fit economic guidelines. They either were in a household with income at or below 400% of the federal poverty level or their medical debt equaled or exceeded 5% of their total household income, according to the county.
Orange County received about $271 million from the American Rescue Plan Act of 2021, with county officials targeting five areas to spend the money: business assistance, social and community services, health and public safety, infrastructure projects, and revenue recovery.
Last year, the county board approved a $4.5 million contract with Undue Medical Debt, a New York-based nonprofit that identified the residents’ debt. Orange County could not provide details on the average amount of debt relieved per person or where their medical bills came from.
“It’s a one-time shot in the arm. This opportunity doesn’t really come too often, that we’d have this level of resources,” said Warren Lakhan, the family services administrator for Orange County. “I think it’s going to be impactful. It could really turn the course of someone’s life around if they’re uninhibited by debt.”
