Snapchat CEO Evan Spiegel and his wife, model and entrepreneur Miranda Kerr, are backing one of California’s largest medical debt relief programs. Their donation will help more than 261,000 residents eliminate more than $550 million in unpaid medical bills. The initiative is implemented through the non-profit organization Undue Medical Debt. The charity purchases qualified medical debt from health care providers and debt collectors before canceling it. The relief is expected to help low-income families and others struggling with medical costs. Beneficiaries do not need to apply for or repay canceled debt. The donation also highlights the growing role of philanthropy in addressing U.S. medical debt.
How Evan Spiegel and Miranda Kerr’s $550M Medical Debt Donation Works
Debt relief is available through “Undue Medical Debt” (formerly “RIP Medical Debt”). Rather than paying the full value of unpaid medical bills, the organization purchased a portfolio of qualified debt on the secondary market at a deep discount. Since medical debt often sells for only a fraction of its original value, donations can eliminate hundreds of millions of dollars’ worth of debt. According to the organization, for every $1 donated, about $100 of medical debt can be forgiven, but the exact amount depends on the debt mix.Residents do not need to apply for assistance. Instead, Excessive Medical Debt uses financial criteria to identify eligible accounts. Generally speaking, debt may qualify if the family’s income does not exceed four times the federal poverty level, or if the medical debt is equal to at least 5 percent of the family’s annual income. Eligible recipients will be notified immediately when their debt is cancelled. Forgiven debt also does not create a tax liability.
Why medical debt remains a major problem
Medical debt affects millions of Americans, including many who have health insurance. High deductibles, copays, emergency treatments and out-of-network costs often leave families unable to afford the bill. Medical debt can hurt credit scores, delay health care and cause long-term financial hardship, financial experts say. Organizations like Excessive Medical Debt work to reduce this burden while advocating for reforms to prevent the accumulation of medical debt.Founded in 2014, Undue Medical Debt has become one of the largest organizations in the United States dedicated to eliminating medical debt. The nonprofit will change its name to “RIP Medical Debt” in 2024 to reflect its broader mission of addressing healthcare-related financial hardship. The organization says it has forgiven more than $40 billion in medical debt for more than 27 million people since its inception. This makes it one of the largest charitable debt relief organizations in the country.
The Philanthropic History of Evan Spiegel and Miranda Kerr
The California Medical Debt Initiative is the latest in a series of major philanthropic efforts by Evan Spiegel and Miranda Kerr. Through the Spiegel Family Foundation, the couple supports education, public health and community development. In 2022, they donated more than $10 million to pay off the student loan debt of graduates of Otis College of Art and Design in Los Angeles. This donation enables hundreds of students to free themselves from education-related debt and start their careers.
