Arizona Governor Katie Hobbs plans to cancel $2 billion in medical debt for up to 1 million residents

Arizona Governor Katie Hobbs plans to cancel $2 billion in medical debt for up to 1 million residents.


"Today, I am thrilled to announce our initiative to alleviate medical debt for an estimated 1 million Arizonans," Hobbs stated at a press briefing on Monday. "This represents a fresh start, a new beginning, and a significant burden lifted off the shoulders of each individual."

Hobbs explained that Arizona will utilize up to $30 million from the American Rescue Plan Act to collaborate with the nonprofit RIP Medical Debt. Together, they aim to purchase approximately $2 billion in medical debt held by Arizonans.

"Hard-working, middle-class Arizonans should not have to endure difficult conversations at their kitchen tables due to medical debt arising from uncontrollable circumstances," Hobbs emphasized. "As a social worker, I understand that feeling trapped in a financial hole can lead to problems far beyond just the debt itself."

Jeff Smedsrud, a board member for RIP Medical Debt, outlined that the program will erase debt for individuals earning less than 400 percent of the federal poverty level or whose debt amounts to 5 percent or more of their annual income.

Hobbs' announcement follows Connecticut Governor Ned Lamont's plan to cancel medical debt, which involves using $6.5 million from the American Rescue Plan Act to eliminate $1 billion of medical debt in collaboration with a nonprofit organization.

"This debt is not a result of overspending but rather a consequence of facing a medical emergency," Lamont emphasized. "People should not have to suffer twice—first from the illness and then from the debt."

State officials estimated that around 250,000 Connecticut residents would have their medical debt erased through this initiative.