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A gift from Evan Spiegel and Miranda Kerr erased $550 million in medical debt for more than 261,000 Californians, with no application needed
In June 2026, Undue Medical Debt announced that a gift from Evan Spiegel and Miranda Kerr wiped out more than $550 million owed by more than 261,000 people.
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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. 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. The group called it its largest statewide debt cancellation in California so far, and said notices would start arriving in mid-July.
How the debt was wiped out
No one had to apply for anything. Undue buys qualifying debt in bulk from hospitals, physicians' groups and collection agencies for pennies on the dollar, then erases it and sends a notice to each person. The group can only cancel debts it has bought, and people cannot apply for relief. Eligible individuals are those at four times the federal poverty level or less, or approximately $100,000 for a family of four, or those with medical debt equal to 5% or more of their annual income. The biggest total was in San Diego County, where some $99 million was wiped out for more than 40,000 people. After that was Riverside County, which got about $69.5 million for more than 35,000 people. Undue, formerly known as RIP Medical Debt, launched in 2014. Spiegel and Kerr are not the first high-profile donors. Philanthropist MacKenzie Scott donated $50 million to Undue in 2020 and $30 million in 2022, according to a 2022 Undue announcement.
What the research found
Economists Raymond Kluender, Neale Mahoney, Francis Wong, and Wesley Yin tried to find out what debt relief actually does. Their paper, ‘The Effects of Medical Debt Relief: Evidence from Two Randomized Experiments,’ was published in the Quarterly Journal of Economics in 2024. It begins with a simple fact: two in five Americans carry medical debt, and almost half owe at least $2,500.
Between 2018 and 2020, the team collaborated with RIP Medical Debt and conducted two randomized experiments. Thus, some people had their debt forgiven, and some similar people did not, and researchers could compare the two groups. The relief had a face value of $169 million and went to 83,401 people. 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.
What relief can and cannot do
These findings do not mean that debt relief is useless. The study looked at downstream debt, bills in collections or headed that way, and relief offered from 2018 to 2020. Years later came the gift from California, and it was far larger. Undue's release doesn't break down the debt by type. 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. They suggested that relief might work better earlier, closer to the medical event.
For more than 261,000 Californians, the relief was real, and Spiegel and Kerr said they hoped it would bring peace of mind. Undue also says that debt relief is immediate, but avoiding new debt means making the healthcare system itself better.
