(The Center Square) – As medical debt in the Golden State climbs higher, one lawmaker proposes to use taxpayer money to relieve the burden of high medical costs for an estimated 40% of Californians – 15.8 million people.
The legislation proposing the taxpayer-funded fix – Assembly Bill 2123, the Medical Debt Relief Act of 2026 – would use state general fund revenue to purchase and cancel medical debt for residents who can’t pay off debts related to high deductibles, cost-sharing and other health care costs, the bill’s author said.
“What is especially troubling is this isn’t just people without insurance,” Assembly Majority Leader Cecilia Aguiar-Curry, D-Davis and the author of the bill, said during a press conference on Monday morning. “Many people who do have coverage still end up with bills they can’t afford. When those bills go unpaid, they’re often sent to collections, damaging credit for years, and making it harder to find a place to live, to get a job or take out a loan.”
In a recent version of the bill, approximately $2.5 million was allocated from California’s general fund to pay off the medical debt of those who can’t pay it off themselves. That dollar figure was struck from the current version of the bill, although it can still be seen in red lettering with a strikethrough mark through it.
The dollar figure allocated to medical debt relief is still being worked out, said California State Treasurer Fiona Ma, answering The Center Square’s question at the press conference at the Capitol.
“We’re still working on it since we don’t know how many people have medical debt that would qualify in this moment,” Ma told The Center Square. “Part of this press conference is trying to assess people to come out and share their stories with us so we can get some sort of ballpark.”
The bill would establish a medical debt relief program under the California Health Facilities Financing Authority, a division of the California State Treasurer’s Office. The Department of Health Care Access and Information would work with the authority to run the program, according to the bill.
Both agencies would have to contract with a medical debt relief coordinator to acquire debt from health care providers or debt buyers, according to the bill.
Those who spoke in support of the bill on Monday said they or a family member struggled with high medical debt, which affected decisions made about health care and bills. The advocates, one of whom is a cancer patient, said they shouldn’t have to decide between food and health care costs just to stay alive.
“For patients like me, the cost of survival is staggering,” Spencer Dayton, a public health advocate and stage 4 colon cancer patient, said during the press conference. “My treatments come with a $2,000 co-pay every time. I have outstanding $500,000 medical debt for a necessary biopsy.”
Dayton said he takes medications that cost several hundred dollars, none of which are optional expenses.
“These are the costs of me staying alive,” Dayton said. “No one chooses cancer or chronic illness. No one chooses medical debt. Patients should be focused on treatment, on their families, and on surviving, not whether or not the next bill will destroy what’s left of their very small lives.”
According to a report published in 2024 by the California Health Care Foundation, roughly 38% of Californians carry medical debt.
One in five residents of the state have at least $5,000 in medical debt, the report shows. A more recent report from the California Pan-Ethnic Health Network shows that Californians owe $10.5 million in medical debt and that low-income or middle-income Californians were more likely to struggle to pay their medical bills. People in communities of color also were reported to struggle significantly with medical debt.
The California Hospital Association, which has opposed medical debt relief legislation in the past, responded to an email from The Center Square on Monday to say that the association does not have a stance on the bill. Researchers who have conducted studies about medical debt said they were not available to answer questions on Monday.
