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

Governor Katie Hobbs (D-AZ) spoke with KTAR this week about her administration's medical debt relief program, which she has said has now erased $642 million in debt for nearly half a million Arizonans, and she says the work is far from over.

The initiative, one of Hobbs' signature efforts to improve economic stability for working-class families, is a partnership with Undue Medical Debt, a national nonprofit that purchases qualifying medical debt from hospitals and collection agencies in bulk at a fraction of its face value.

On average, one dollar spent erases roughly $100 in debt. To qualify, Arizonans must earn at or below 400 percent of the federal poverty level, or owe at least five percent of their annual income in outstanding medical bills, meaning the relief targets those genuinely unable to pay.

To add, in the KTAR interview, Hobbs recalled a recent encounter that put a human face on the numbers.

"Last week I had an Arizonan come up to me and said I benefited from this. I cannot tell you the difference it made in my life," she said. "Medical debt is crippling for people."

What the Program Entails

The program uses American Rescue Plan Act funds to purchase the debt, and there is no application process; eligible Arizonans simply receive a letter in the mail notifying them their debt has been erased.

Last December alone, more than 141,000 Arizonans received that news.

The stories from recipients reflect the program's real-world impact, as a Sierra Vista resident described years of struggling with hospital bills tied to arthritis and gout.

Then, a Phoenix resident said the relief came from debt connected to a surgery that led to the birth of her son. A Sun City resident was in the middle of treatment for multiple myeloma when they learned their bills had been paid.

"Too many Arizonans have fallen into medical debt through no fault of their own," Hobbs said. "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."

The administration's goal is to ultimately erase up to $2 billion in medical debt for as many as one million Arizonans.