On June 25, 2026, Undue Medical Debt , a nonprofit that buys and erases unpaid bills, announced that a gift from Evan Spiegel and Miranda Kerr wiped out more than $550 million owed by more than 261,000 people. Most of us probably know the sinking feeling of opening a bill we cannot pay.
This summer, hundreds of thousands of Californians were supposed to get a very different letter, one that said their medical debt was gone. The group called it its largest statewide debt cancellation in California so far, and said notices would start arriving in mid-July.
Thus, some people had their debt forgiven, and some similar people did not, and researchers could compare the two groups. The results were mixed. Credit access improved modestly, but only for debt that would otherwise remain on credit reports. Payments on other outstanding medical bills dropped a little. The authors found no effects on survey measures of mental health, physical health, health care use, or financial wellness . However, it’s worth keeping in mind that the study measured broad statistical outcomes across a different population and time period, not the individual experience of having a years-old bill disappear.
Between 2018 and 2020, the team collaborated with RIP Medical Debt and conducted two randomized experiments. The relief had a face value of $169 million and went to 83,401 people.
These findings do not mean that debt relief is useless. Years later came the gift from California, and it was far larger. Undue’s release doesn’t break down the debt by type.
The study looked at downstream debt, bills in collections or headed that way, and relief offered from 2018 to 2020.
They suggested that relief might work better earlier, closer to the medical event. The authors also observed that medical debt has become much less visible in credit reports in recent years, so the credit benefits may be less today.
