Spiegel & Kerr Wipe Out Debt for 261k Californians

A substantial gift from Evan Spiegel and Miranda Kerr has led to the cancellation of over $550 million in medical debt for more than 261,000 Californians. Announced on June 25, 2026, by the nonprofit Undue Medical Debt, this initiative represents the organization's largest statewide debt erasure in California to date. Notices of this relief began reaching recipients in mid-July.

The debt was eliminated without any application process. Undue Medical Debt purchases qualifying medical debts from healthcare providers and collection agencies, then forgives them. Eligibility is determined by income levels, with individuals at or below four times the federal poverty line, or those whose medical debt exceeds 5% of their annual income, being qualified. San Diego County saw the most significant relief, with approximately $99 million erased for over 40,000 residents.

Research on the effects of medical debt relief, published in the Quarterly Journal of Economics, has yielded mixed findings. A study involving two randomized experiments between 2018 and 2020 found modest improvements in credit access for debt that would have remained on credit reports. However, it noted no significant effects on mental or physical health, healthcare utilization, or overall financial wellness.

While the research focused on older, downstream debts and a different time period, the impact of the recent large-scale cancellation is expected to be profound for those directly benefiting. Undue Medical Debt emphasizes that while debt relief provides immediate peace of mind, systemic improvements in the healthcare system are also necessary to prevent future debt accumulation.