Evan Spiegel has never been the loudest billionaire in the room. Sometime this spring, the Snap co-founder and his wife, supermodel and KORA Organics CEO Miranda Kerr, quietly made a multimillion-dollar donation to a nonprofit called Undue Medical Debt. The Los Angeles Times reported that in doing so, set in motion the erasure of $550 million in unpaid medical bills for more than 261,000 Californians.
The move places Spiegel alongside MacKenzie Scott as one of the most significant individual donors to the medical debt relief movement—a fast-growing philanthropic trend that has found a peculiar but powerful arbitrage at the intersection of distressed debt markets and American healthcare dysfunction.
Starting in mid-July, Californians will begin receiving letters informing them that their medical debt has been erased. Recipients are automatically eligible if they earn at or below 400% of the federal poverty level, or if their medical debt exceeds 5% of their annual income. San Diego County will see the largest share of relief—roughly $99 million for approximately 40,000 residents. Los Angeles County will receive $26.7 million in relief for around 17,500.
“The scale of this gift to Californians is truly astonishing, unburdening over a quarter million families of over half a billion dollars of un-payable medical debt,” said Undue Medical Debt president and CEO Allison Sesso. With one in four U.S. adults having medical debt, she called it a “growing crisis undermining healthcare access, economic wellbeing and mental health.” Nobody should go bankrupt because of a cancer diagnosis and no family should have to choose between insulin and groceries, she argued, while thanking Evan and Miranda for sharing in that belief.
The model Spiegel used was pioneered at scale by Scott, the Amazon founder’s ex-wife who has become the most prolific philanthropist of her generation. Scott gave Undue Medical Debt—then known as RIP Medical Debt—$50 million in 2020, followed by $30 million in 2022, and a rare third donation in December 2024. Her gifts helped transform what had been a scrappy debt-buying nonprofit into a nationally recognized force, now having abolished more than $40 billion in medical debt across all 50 states.
The mechanics are straightforward but striking. Hospitals and physician groups routinely sell uncollectible patient debt in bulk portfolios at steep discounts. Undue Medical Debt steps into that market as a buyer, acquiring the portfolios at the same steep discounts and then abolishing the debt entirely rather than attempting to collect. The result: every $10 donated eliminates roughly $1,000 in patient debt. Spiegel’s undisclosed donation leveraged that ratio to wipe out more than half a billion dollars in obligations.
Spiegel is not alone. The past three years have seen a wave of high-profile donors and government entities adopt the same playbook. In 2023, the Jane and Daniel Och Family Foundation—backed by hedge fund billionaire Daniel Och—used it to erase $264 million in debt for more than 125,000 Miami-Dade residents. New York City committed $18 million in municipal funds to clear nearly $135 million for more than 75,000 New Yorkers. Cook County, Illinois, deployed just $9 million in federal ARPA funds toward $1 billion in relief for its residents.
The movement reached its single largest moment in April 2025, when Undue Medical Debt announced a blockbuster deal to retire a $30 billion portfolio—wiping out obligations for 20 million people in a single transaction after a major debt trading firm exited the market.
For Spiegel, the California donation is part of a broader philanthropic arc rooted in Los Angeles. In 2022, he and Kerr paid off more than $10 million in student loans for graduates of Otis College of Art and Design—the largest single gift in the school’s history. After the January 2025 wildfires destroyed his Pacific Palisades childhood home, Spiegel, Snap, and co-founder Bobby Murphy donated $5 million in immediate aid and committed $10 million to launch the Department of Angels, a long-term recovery initiative. His net worth currently sits at approximately $2.1 billion, according to Forbes.
The philanthropic momentum, however, is arriving at a complicated moment for systemic reform. A Consumer Financial Protection Bureau rule that would have stripped medical debt from the credit reports of 15 million Americans was vacated on July 11, 2025, by U.S. District Judge Sean Jordan of the Eastern District of Texas, who ruled it exceeded the CFPB’s authority and violated the Fair Credit Reporting Act. No federal medical debt cancellation legislation has advanced in Congress.
That gap between philanthropic scale and policy inaction is precisely what critics of the model point to. Undue Medical Debt’s $40 billion in total relief, while genuinely transformative for millions of individuals, represents a fraction of the estimated outstanding medical debt held by American households. At the current pace of voluntary giving, closing that gap through philanthropy alone would require a sustained, decades-long commitment—and continued access to a distressed debt market that may not always offer the same discounts.
For now, 261,000 Californians won’t be thinking about any of that. Sometime next month, a letter will arrive in their mailbox. Their debt is gone.
For this story, Fortune journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing.
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