Governor Hobbs announced that she’s using $30M in COVID relief funds to purchase the medical debt of some Arizonans who earn less than 400% of the Federal Poverty Line or who owe more than 5% of their annual income to medical debt.
AZ Gov. Hobbs to erase medical debt for 1M using COVID relief funds
The state is contracting with RIP Medical Debt (a nonprofit) to identify and buy debt held by collection agencies, medical providers and hospitals using the COVID relief funds.
This kind of debt relief is actually an evidence-based public health intervention. A recent article in JAMA entitled: Associations of Medical Debt With Health Status, Premature Death, and Mortality in the US concluded that:
“In this cross-sectional study of 2943 US counties, a higher share of the population with medical debt was associated with more days of poor physical and mental health, more years of life lost, and higher mortality rates for all-cause and leading causes of death following a dose-response association.”
These findings suggest that medical debt is associated with worse population health and that policies increasing access to affordable health care, such as expanding health insurance coverage, may improve population health.”
Indeed, AZPHA supported the successful Predatory Debt Collection Protection Act which passed in November 2022 precisely because of the link between debt relief and improved health status.
Because medical debt can be bought for pennies on the dollar, the $30M in COVID relief funds has the potential to wipe out between 1.5B and 2B in existing medical debt.
It will probably take a little time for this to actually happen on the ground – but some relief is on the way.
Predatory Debt Collection Protection Initiative: Policy Paper
