Assembly Majority Leader Cecilia Aguiar-Curry. Courtesy photo

SACRAMENTO, CA (MPG) — Assembly Majority Leader Cecilia Aguiar-Curry’s Assembly Bill 2123 (AB 2123), The Medical Debt Relief Act, will be heard in the Assembly Appropriations Committee on Wednesday, May 6. The bill aims to address the growing burden of medical debt on California families by creating a state fund to provide medical debt relief for eligible low- and middle-income Californians.

“Too many Californians are doing everything right and still getting buried in medical debt they realistically can’t pay,” said Assembly Majority Leader Cecilia Aguiar-Curry (D-Winters). “AB 2123 takes a common-sense approach—buying up that debt for pennies on the dollar and wiping it out.”

AB 2123 would establish a Medical Debt Relief Program within the California Health Facilities Financing Authority, in partnership with the Department of Health Care Access and Information. It would authorize the state to contract with a debt relief coordinator to acquire and cancel qualifying medical debt. The program would be funded with a $2.5 million General Fund investment and leverage the secondary debt market held by providers or collectors and purchase it at a reduced cost to eliminate it. Eligibility would include households earning up to 400% of the federal poverty level or those with medical debt exceeding 5% of their income. Nearly 40% of Californians carry medical debt, often driven by high out-of-pocket costs, deductibles, and unexpected bills—even among the insured. Once in collections, this debt can damage credit for years and contribute to housing and financial instability.

This bill builds on successful local and state efforts to address large-scale debt relief. In 2024, Los Angeles County launched a pilot program that erased $363 million in medical debt with a $5 million investment by purchasing medical debt on the secondary market for pennies on the dollar, making the program highly cost-effective. In the same year, SB 1061 (Limón) was signed into law, which prevents medical debt from appearing on credit reports. AB 2123 is the next phase of direct, large-scale debt relief for Californians.

Members of the public and press are encouraged to follow the hearing and participate in the legislative process. To track bill progress, please visit the California Legislative Information website.