PHOENIX – In a major relief effort, Gov. Katie Hobbs announced that $429 million in medical debt has been erased for more than 352,000 Arizonans, thanks to a partnership with Undue Medical Debt, a national nonprofit.
The organization is working under a $10 million contract funded by federal COVID relief dollars from the American Rescue Plan Act. So far, just $2 million has been used to eliminate hundreds of millions in debt, giving the state an impressive return on investment.
“That return on investment is actually pretty impressive — over $200 for every $1 that we spend,” said Courtney Story, vice president of government initiatives at Undue Medical Debt.
How It Works
Undue Medical Debt buys medical debt in bulk from hospitals and collection agencies at a steep discount—pennies on the dollar—and then cancels it completely.
The nonprofit does not require an application. Instead, it uses income data to automatically purchase and cancel debt for eligible Arizonans:
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Those earning less than 400% of the federal poverty level, or
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Those who owe more than 5% of their annual income in medical debt.
What’s Next
Undue Medical Debt plans to cancel more debt in the coming months and expects to use the full $10 million by the end of next year. Their goal is to erase up to $2 billion in medical debt statewide.
Arizona households are estimated to carry $2.4 billion in medical debt overall, according to the governor’s office.
What to Expect if Your Debt Is Erased
Eligible Arizonans will receive a branded letter in the mail from Undue Medical Debt. Some recipients have already been notified.
“We don’t ask for any personally identifiable information as part of our recipient process,” Story emphasized. “All we ask for is the gift ID included in the letter to confirm your status through our website.”
This initiative is one of the largest state-level efforts to erase medical debt in the country, offering a fresh start for thousands of families.
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