PHOENIX — Gov. Katie Hobbs has announced that $429 million in medical debt has been erased for hundreds of thousands of Arizonans.
Undue Medical Debt, a national nonprofit, has a $10 million contract with the state to buy and cancel medical debt for Arizonans using federal COVID relief dollars. The group has so far spent $2 million to help more than 352,000 Arizonans.
"So that return on investment is actually pretty impressive — over, you know, $200 for every $1 that we spend," said Courtney Story, the group's vice president for government initiatives.
Undue Medical Debt purchased medical debt in bulk from hospitals and collection agencies for pennies on the dollar.
The nonprofit plans to announce more debt cancellations later this year and expects to spend the rest of the money by the end of next year, Story told ABC15.
Arizonans are estimated to have about $2.4 billion worth of medical debt, according to the governor's office.
Last year, Hobbs announced the initiative to erase medical debt, and the state funded it with expiring American Rescue Plan Act money. Undue Medical Debt is aiming to buy up to $2 billion worth of medical debt for Arizonans.
The Governor’s Office said Arizonans who have had their medical debt erased will receive a branded letter in the mail from Undue Medical Debt. Some letters have already gone out, while others will arrive in the coming weeks.
Story told ABC15 that recipients do not need to take any action.
"We don't ask for any personally identifiable information as part of our recipient process," she said. "All we'll ask for is the gift ID that is included on the letter, and that's how we'll ensure that you're an actual recipient and you're plugged into our website."
Arizonans who earn less than 400% of the federal poverty level or owe at least 5% of their annual income for outstanding medical bills are eligible. Because Undue Medical Debt buys the debt of eligible individuals in bulk, there is no application process.
