For hundreds of thousands of Americans, this summer brings a rare and unexpected reprieve: the sudden erasure of crushing medical debt. In an unprecedented wave of philanthropy and nonprofit action, more than 400,000 residents across California and Massachusetts are set to have a combined $720 million in medical bills wiped out—an intervention that’s both life-changing for individuals and a stark commentary on the state of the U.S. healthcare system.
On June 25, 2026, Snap CEO Evan Spiegel and his wife, supermodel and KORA Organics founder Miranda Kerr, announced a multimillion-dollar donation to Undue Medical Debt, the New York-based nonprofit that specializes in buying up medical debt for pennies on the dollar and abolishing it. Their gift—whose exact amount remains undisclosed—will erase $550 million in medical debt for more than 261,000 Californians, according to Los Angeles Times reporting.
“When someone you love is sick, all you want to do is focus on helping them get better,” Kerr said in a video released with Spiegel. “That’s why we wanted to support this effort and help relieve medical debt, so families can focus on caring for their loved ones and really supporting their healing.”
The mechanics behind this relief are as remarkable as the numbers themselves. Undue Medical Debt acquires portfolios of overdue bills from hospitals, physician groups, and collection agencies in bulk, paying only a fraction of the original cost. According to the nonprofit, every $10 donated typically translates into $1,000 in debt relief—a staggering return on philanthropic investment.
“At a time when many families are already facing rising costs across nearly every aspect of daily life, an unexpected medical bill can create financial stress that lasts for years,” Spiegel said in a statement. He added that California has given much to his family and that he cares “deeply about the wellbeing of our communities.”
Californians benefiting from the donation will begin receiving official letters in mid-July, informing them that their debts have been cleared. There’s no application process; Undue Medical Debt uses third-party data to identify those eligible—typically individuals earning at or below 400% of the federal poverty level or those whose medical debt exceeds 5% of their income.
The impact is especially pronounced in San Diego County, where $99 million in debt relief will reach over 40,000 people. In Los Angeles County, nearly 17,500 residents will see $26.7 million in bills disappear. These are not isolated acts for Spiegel and Kerr. In 2022, the couple famously paid off the student loans for Otis College of Art and Design’s graduating class, and after the devastating January 2025 Los Angeles County wildfires—where Spiegel lost his own childhood home—they contributed $5 million in immediate aid and helped launch the Department of Angels, a $10 million initiative for fire recovery efforts.
But California is not alone in this wave of debt relief. On the same day as the Spiegel-Kerr announcement, a coalition in Massachusetts revealed its own record-breaking initiative. The Atrius Health Equity Foundation, Undue Medical Debt, and the Massachusetts Health & Hospital Association purchased $170 million in medical debt, targeting more than 140,000 residents—primarily moderate-to-low income individuals in Eastern Massachusetts. The debts covered range from as little as $50 to as much as $450,000.
Allison Sesso, president of Undue Medical Debt, described the emotional impact of these efforts: “They open it up and they sort of are in disbelief, right? I mean, it’s hard to believe that in these days that a piece of good news just sort of drops in your lap. When they realize that it’s real, we often hear, you know, messages of not only joy but real relief.”
This is not the first such effort in Massachusetts. Since 2023, the three organizations have jointly relieved a total of $255 million in medical debt owed by residents, according to their joint press release. Yet, experts and advocates alike caution that while these philanthropic interventions are vital, they merely address the symptoms of a much larger systemic problem.
Vikas Saini, president of the independent Lown Institute think tank in Needham, put it bluntly: “I think experts on medical debt generally, you know, would see this type of action as sort of notable, but really a finger in the dike of a much bigger problem.”
Indeed, the scale of medical debt in the United States is daunting. According to Undue Medical Debt, one in four American adults currently carries medical debt. The organization says it has abolished more than $40 billion in medical debt across all 50 states as of June 2026. California, one of the most expensive states due to soaring housing and energy costs, is especially hard hit. And in Massachusetts—despite some of the nation’s highest insurance coverage rates—over 12% of residents still struggle with medical bills, as reported by the Center for Health Information and Analysis.
“People end up with medical bills, whether it’s because of high cost sharing in private health plans, like high deductibles, or whether it’s because there are gaps in coverage in public programs,” explained Andrew Cohen, director of Health Law Advocates, a nonprofit law firm collaborating with the Atrius Health Equity Foundation.
The burden of medical debt does not fall evenly. In Massachusetts, one in five Black residents reported medical debt in a recent state study, compared to one in eight white residents. “We know that medical debt disproportionately impacts low-income populations and populations of color, and so that’s another reason why we are working to address this problem,” said Ann Hwang, president of the Atrius Health Equity Association.
Eligibility for relief is determined not by application, but by data: Undue Medical Debt focuses on borrowers who owe 5% or more of their annual income or fall below a certain income threshold based on family size. Recipients cannot apply for aid; instead, their debts are bundled and targeted for relief based on these criteria.
The ripple effects of this relief go beyond financial ledgers. As Sesso pointed out, “We recognize that what we do is cleaning up the mess at the end of the line, but it’s important for those individuals. And I do think that it sparks a larger conversation about what we can do differently.” The fear of seeking future care—a common consequence of overwhelming debt—is eased, at least for those lucky enough to benefit from these initiatives.
Still, there’s little debate that systemic reforms are needed. As Cohen noted, “It may be in some senses a Band-Aid from a systemic perspective, but when it comes to the relief that it provides individuals, it can really have an absolutely critical impact on their lives.”
While the debate over healthcare reform and wealth inequality continues to simmer in the political arena, these sweeping acts of debt relief serve as a rare moment of hope—proof that, even within a flawed system, collective action and targeted generosity can offer real and immediate change for those most in need.