Over 352,000 Arizonans getting $429M in medical debt relief through state partnership

PHOENIX – Over 352,000 Arizona residents are getting $429 million in medical debt relief through a state partnership with a national nonprofit organization, Gov. Katie Hobbs announced Wednesday.

The program benefits Arizonans who earn 400% or less of the federal poverty level and/or residents who have outstanding medical bills totaling at least 5% of their annual income.

Nonprofit group Undue Medical Debt is sending branded letters through the mail informing eligible recipients that some or all of their debt is being wiped out. There is no application process.

“By erasing debt for hundreds of thousands of people across our state, we are creating pathways to economic security and empowering them to realize their full potential,” Hobbs said in a press release.

How are state, nonprofit group helping wipe out medical debt?

Last year, Hobbs started an initiative called Affordable Arizona: Tackling Medical Debt for Working Families.

She allocated up to $30 million in American Rescue Plan Act funding so Undue Medical Debt could buy out debt from hospitals and collection agencies for pennies on the dollar.

“Medical debt is a burden that often prevents people from seeking necessary care simply because they got sick, were in an accident or were born with a chronic condition,” Allison Sesso, president and CEO of the nonprofit group, said in the release. “This investment demonstrates Arizona’s commitment to ensuring that no one should face financial ruin for seeking care, and we’re grateful to work with providers across the state who recognize that removing these unpayable debts of necessity helps their communities thrive.”

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