As the 2024 elections season gets underway, Arizona’s Democratic Gov. Katie Hobbs has announced that her administration is erasing around $2 billion in medical debt of state residents.
“For many,” Hobbs said from the podium on Monday, “health care is the difference between being confined to one’s home and being able to enjoy time with their families. It’s the difference between being held back by a chronic condition and pursing a lifelong career.”
“In some instances, health care is the difference between life and death,” she continued.
“No Arizonan should have debt hanging over their head because they needed help through no fault of their own,” she said. “As governor, I take seriously my duty to protect vulnerable Arizonans, from falling into medical debt and make health care more affordable.”
She went on to announce plans to retire the medical debt for up to one million state citizens.
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“That’s a fresh start, a new chapter, and a huge weight taken off the shoulders for every single one of them,” Hobbs exclaimed.
“This is an investment in our future and reflects my commitment to put the needs of working Arizonans first,” she said.
Gov. Katie Hobbs (D-AZ) announces Arizona will partner with a nonprofit to buy back up to approximately $2 billion worth of medical debt held by residents in the state:
“No Arizonan should have debt hanging over their head because they needed help through no fault of their own.” pic.twitter.com/pi7Z6FwHOD
— The Recount (@therecount) March 4, 2024
Hobbs said that her plan taps $30 million in American Rescue funds to partner with RIP Medical Debt to “buy back” up to two billion dollars in medical debt.
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The American Rescue funds Hobbs referenced is a federal plan contained in the 2021 American Rescue Plan Act, which is supposed to be used for coronavirus relief, according to AZCentral.
“This was an easy decision. Arizonans deserve a break, and they deserve a government that fights for them, helping ensure that medical debt is not going to torpedo their lives,” Hobbs said.
The non-profit RIP Medical Debt will use the state and federal funds to buy medical debt held by collection agencies, medical providers, and hospitals.
The debt holders will likely be happy to take the tax dollars despite selling off the debt for pennies on the dollar because in many cases the debt is hard to collect from indigent consumers.
The Arizona plan will allow Arizonans to obtain medical debt relief if they have an income up to 400 percent above the federal poverty level or hold debt that is five percent or more of their annual income. The federal poverty level is currently $31,200 a year for a family of four.
AZCentral added that once RIP Medical Debt retires a person’s debt, they will be notified by mail that they benefited from the program.
By some accounting, Americans owe up to $220 billion in unpaid medical debts, the outlet reported.
