Governor Katie Hobbs Announces $642 Million in Medical Debt Erased for Nearly Half a Million Arizonans

Phoenix, AZ - Today, Governor Katie Hobbs announced that 141,000 more Arizonans have had their medical debt erased through her historic initiative to improve economic stability and health outcomes for working class Arizonans. To date this effort, which is a partnership between the Hobbs administration and the national nonprofit Undue Medical Debt, has eliminated $642 million in medical debt for more than 485,000 people across Arizona.

“I am committed to helping Arizonans achieve economic stability and prosperity. By erasing medical debt for hundreds of thousands of Arizonans, we are doing just that,” said Governor Katie Hobbs. “Too many Arizonans have fallen into medical debt through no fault of their own. It forces them to make an impossible decision between paying off their debt or putting gas in their car, food on their table and air conditioning in their home during hot summer months. Our working families shouldn’t suffer from a broken system that forces them to pay ever increasing amounts of money to access life-saving care. I’m glad to deliver this lifeline to Arizonans who are struggling to get by. I encourage Arizonans who receive a letter to open it—relief is inside!”

This week, debt relief letters for more than 141,000 Arizonans will begin to arrive in mailboxes. Program beneficiaries receive a branded letter in the mail from Undue Medical Debt notifying them that some or all of their debt has been erased. The envelope appears like this:

Governor Hobbs’ initiative aims to erase as much as $2 billion in medical debt for up to one million Arizonans. The state made American Rescue Plan Act funds available to Undue Medical Debt to purchase qualifying medical debt from providers like hospitals and collection agencies in bulk for pennies on the dollar and cancel the balance. As a consequence, one dollar donated to the nonprofit erases, on average, $100 of medical debt.

“I’m thrilled to announce over $200 million in additional medical debt relief for Arizona residents in time for the holidays,” said Undue Medical Debt CEO and president Allison Sesso. “Governor Katie Hobbs and her team have been staunch advocates of medical debt relief and it’s heartening to know that over half a billion dollars of unpayable debt has been erased for burdened families to date. I’m hopeful they will feel empowered to re-engage with the healthcare system and we look forward to more relief in the future.”

There is no application process for this program. Arizonans eligible for debt relief are  individuals who earn at or below 400% of the Federal Poverty Level and/or individuals who owe at least 5% of their annual income for outstanding medical bills. These are Undue’s criteria for debt relief; the nonprofit can only erase medical debts acquired from participating partners like hospitals and collection agencies. Learn more here.

Medical debt has profoundly harmful consequences for individuals and the communities they live in, leading to postponement of critical and often lifesaving care, declining credit scores and job opportunities, and physical and mental health issues. Prior to the governor’s initiative, the amount of medical debt in Arizona was estimated to be $2.4 billion.

"For years I struggled with the debt of previous and current hospital bills. It was hard to catch up or even make a payment, especially at times when other bills are due or start to pile up. Having arthritis and bad gout attacks would lead me to the E.R., therefore causing the medical debt. One day, I received a letter and [letting me know] my debt had been relieved and was no longer owed. I was truly happy and grateful," said a resident from Sierra Vista, one of more than 485,000 Arizonans who had medical debt abolished.

"I want to personally thank you for relieving my debt—it was a significant burden, and your decision has truly changed my life. That debt came from a surgery that ultimately blessed me with my son, as I became pregnant shortly after. I'm beyond grateful for this gift and for the relief you have provided. Your kindness and leadership mean so much. With deepest appreciation," said a resident from Phoenix, one of more than 485,000 Arizonans who had medical debt abolished.

“I was blessed by the generous hearts of Undue Medical Debt at a time when I felt like I was drowning in medical debt. I was diagnosed with multiple myeloma. As I was being treated, my medical bills were growing. The blessing I received by learning that Undue Medical Debt had paid a bill for me was so unexpected and so appreciated. It's good to know that there are still hearts full of gracious acts of kindness,” said a resident from Sun City, one of more than 485,000 Arizonans who had medical debt abolished.

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