More than 141,000 Arizona residents will receive letters this week notifying them that their medical debt has been relieved.
So far, Democratic Governor Katie Hobbs’ administration and nonprofit Undue Medical Debt have eliminated $642 million in medical debt for 485,000 Arizonans, according to a Dec. 22 news release from the governor’s office. The effort is part of an initiative to wipe out up to $2 billion in medical debt for 1 million residents.
Arizona made American Rescue Plan Act funds available to Undue Medical Debt to buy qualifying debt from participating partners — such as hospitals or collection agencies — in bulk for “pennies on the dollar” and cancel the debt. On average, one dollar donated to the nonprofit erases $100 in medical debt, the release said.
Arizonans earning at or below 400% of the federal poverty level, or those who owe at least 5% of their annual income for medical bills, are eligible for the program. There is no application process.
Other areas, such as New York City and North Carolina, have also partnered with Undue Medical Debt. It comes as legislators in several states are advancing medical debt protections, while the Consumer Financial Protection Bureau maintains that states cannot regulate consumer credit reports.
