Arizona Gov. Katie Hobbs announces 141,000 Arizonans to have $213M in medical debt forgiven

Nearly 500,000 Arizonans will have now had $642 million in medical debt forgiven, thanks to a state partnership with a national nonprofit.

BY JEFF VINTON

Dec 22, 2025, 10:40 AM Updated: 12:21 pm

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PHOENIX — Arizona Gov. Katie Hobbs provided an early Christmas present for 141,000 Arizonans, who will have $213 million in medical debt forgiven starting Monday through a state partnership with a national nonprofit.

The Democratic governor made the announcement during an interview with 12News.

“This is huge for folks that are struggling with medical debt and we know there’s so many of them across the state,” Hobbs told the Phoenix TV station.

Monday’s announcement amounts to the second round of debt forgiven through the state’s partnership with the nonprofit Undue Medical Debt. The first, announced in July, allowed more than 352,000 Arizonans to have $429 million in debt relieved.

Further relief is expected, as the governor said the partnership agreement allows up to $2 billion in medical debt to be canceled, meaning that approximately $1.3 billion in funding is left.

How to know if your medical debt was forgiven

Hobbs said the program is open to any Arizonan who earns 400% or less of the federal poverty level and/or any resident who has outstanding medical bills totaling at least 5% of their annual income.

There is no application process, as Undue Medical Debt is working with hospitals and collection agencies to identify eligible accounts, the governor added.

Starting Monday, those whose debt is being forgiven will receive a branded letter in the mail. However, it may not immediately arrive, as Hobbs said it is “a process to identify the eligible folks.”

The debt relief program initially began in 2024, when Hobbs allocated $30 million in American Rescue Plan Act funds to allow Undue Medical Debt to purchase debt from hospitals and collection agencies for pennies on the dollar.