Arizona Cancels $429 Million in Medical Debt for Residents

News Summary

Arizona has announced the cancellation of $429 million in medical debt, benefiting over 352,000 residents through a partnership with Undue Medical Debt. This initiative, led by Governor Katie Hobbs, utilizes federal COVID relief funds and aims to improve community well-being. As Arizonans face approximately $2.4 billion in medical debt, this program offers significant relief to low-income households without requiring complex applications, restoring dignity and stability to many.

Arizona has announced the cancellation of $429 million in medical debt, benefiting more than 352,000 residents. This significant initiative, spearheaded by Governor Katie Hobbs, is made possible through a partnership with the national nonprofit organization Undue Medical Debt. The program not only alleviates financial burdens for many households but also aims to improve overall community well-being and stability.

The project operates on a $10 million contract with Undue Medical Debt, utilizing federal COVID relief funds. So far, the nonprofit has utilized $2 million, demonstrating a remarkable return on investment by providing more than $200 in debt relief for every dollar spent. The organization has purchased medical debt in bulk from hospitals and collection agencies at a fraction of its original cost, effectively wiping the slate clean for thousands of residents.

More debt cancellations are anticipated later this year, as Undue Medical Debt aims to utilize the remaining funds by the end of 2024. Current estimates suggest that Arizonans hold approximately $2.4 billion in medical debt, making this initiative pivotal in addressing this widespread financial issue. The project was initially announced in 2022 and is part of the broader American Rescue Plan Act funding aimed at assisting those most affected by the pandemic.

Recipients of the debt relief will receive letters branded by Undue Medical Debt, notifying them of the cancellation. Some of these letters have already been distributed, with additional notifications expected in the coming weeks. Beneficiaries will not need to take any action to validate their debt relief; they will only require a gift ID provided in the letters for verification purposes. Importantly, the organization does not request any personally identifiable information from recipients.

Eligibility for the debt relief program is inclusive, targeting Arizonans who earn less than 400% of the federal poverty level or those who owe at least 5% of their annual income in medical bills. This broad criteria ensures that a significant number of residents can benefit from the program without undergoing a complicated application process.

The initiative serves a dual purpose, aiming to alleviate financial stress and restore dignity and health to Arizona residents. Governor Hobbs has highlighted the importance of resolving medical debt, considering it a crucial aspect of improving community health and stability. As medical debt remains a pressing issue for many, the collaboration between the state and Undue Medical Debt is a proactive step towards providing relief and addressing the financial strain on households still grappling with ongoing health challenges.

In total, Undue Medical Debt aspires to purchase up to $2 billion worth of medical debt for Arizona residents, further underscoring the scale and intention behind this project. As the initiative progresses, more updates and cancellations of debt are expected, promising continuing support for the residents of Arizona confronting medical debt challenges.

Deeper Dive: News & Info About This Topic

• Fox 10 Phoenix
• ABC 15
• Phoenix New Times
• 12 News
• KTAR News
• Wikipedia: Medical Debt
• Google Search: Medical Debt Relief in Arizona
• Google Scholar: Medical Debt for Arizonans
• Encyclopedia Britannica: Medical Debt
• Google News: Arizona Medical Debt Relief