Arizona erases more than $1 billion in medical debt for nearly 671,000 residents

Gov. Katie Hobbs announced Wednesday that more than $1 billion in medical debt has been erased for nearly 671,000 residents through a partnership with the national nonprofit Undue Medical Debt.

The initiative, which uses no state funds, targets Arizonans who owe at least 5% of their annual income in medical bills or earn at or below 400% of the federal poverty level.

The nonprofit purchases bundled medical debt portfolios from hospitals and collection agencies for a fraction of their face value.

Letters notifying more than 200,000 additional recipients will begin arriving this week. There is no application process. In fact, those eligible do not need to take any action.

“We are restoring hope, dignity and peace of mind for hundreds of thousands of Arizonans,” Hobbs said in a statement.

Medical debt in Arizona was previously estimated at $2.4 billion.

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