Governor canceling $2B in medical debt for up to 1M Arizonans

Arizona Gov. Katie Hobbs (D) announced a program on Monday that will cancel $2 billion in medical debt for Arizonans.

“Today, I am so proud to announce that we are taking steps to retire medical debt for up to an estimated 1 million Arizonans,” Hobbs said at a press conference Monday. “That’s a fresh start, a new chapter and a huge weight taken off the shoulders for every single one of them.”

Hobbs said that by using up to $30 million in American Rescue Plan Act funds, Arizona is “working with partners” at the nonprofit RIP Medical Debt to buy back “up to approximately $2 billion worth of medical debt held by Arizonans.”

“Hard-working, middle class Arizonans should not be forced to have those difficult kitchen table conversations because of medical debt from conditions they cannot control,” Hobbs said. “And as a social worker, I can tell you that feeling stuck in a hole, with no way out, can snowball into problems far beyond debt.”

Jeff Smedsrud, a board member for RIP Medical Debt, said at the press conference that the program will eliminate debt for individuals earning less than 400 percent of the federal poverty level, or whose debt equals 5 percent or more of their annual income.

Hobbs’ announcement follows the unveiling of another plan to cancel medical debt by Connecticut Gov. Ned Lamont (D), which includes using $6.5 million in funds from the American Rescue Plan Act for the cancellation of $1 billion of medical debt, also working with a nonprofit that buys and eliminates debt.

“This is not something they did because they were spending too much money. This is something because they got hit with a medical emergency,” Lamont said about those dealing with medical debt. “They should not have to suffer twice — first with the illness, then with the debt.”

About 250,000 Connecticut residents were expected to have medical debt erased, according to state officials.