Over the next few months, thousands of Arizonans are set to receive a letter stating their medical debt has been paid in full.
Back in March, Arizona Governor Katie Hobbs announced plans to pay off medical debt for up to a million Arizonans.
The organization that is helping with the initiative spoke with Let ABC15 Know saying new details about the initiative will be rolling out soon.
Before year’s end, many people across the state of Arizona could receive a letter in the mail saying their medical debt has been paid.
Allison Sesso, CEO of Undue Medical Debt, a nonprofit organization that provides medical debt relief to millions of Americans, said they are about to get medical debt relief off the ground in Arizona big time.
“Medical debt is clearly an issue that is affecting 100 million Americans,” said Sesso. “There’s $220 billion of medical debt.”
Sesso said the organization was founded in 2014 by two medical former debt buyers. She said they understood that you could buy medical debt for pennies on the dollar and realized that if they took donations they could provide relief instead of trying to collect on that debt. The state of Arizona is the latest government entity to partner with UMD. The organization operates through a mix of private donations and government funding.
“It (Undue Medical Debt) has this unique model that provides massive debt relief for thousands of people at a time,” explained Sesso. Arizona plans to use of to $30 million in American Rescue Plan Act funds to purchase and forgive billions worth of debt held by medical providers for Arizonans. “One dollar gets rid of 100 dollars of medical debt on average.”
Sesso says it has taken some time from the initial announcement for the organization to get into relationships with hospitals, get into contracts with the government and sign the dotted line but, Arizonans should start to receive letters in the mail before the end of the year, although no exact date has been determined.
Here’s how the program works.
UMD works with a hospital or medical provider and agrees to buy medical debt. If your debt is on file with the provider, your debt is automatically relieved. Sesso adds as a requirement for purchasing the debt, it’s taken off that person’s credit report file.
“There is nothing you should do. There’s no tax consequence to you, you just wait for that letter to come,” added Sesso.
Eligibility requirements for Affordable Arizona: Tackling Medical Debt for Working Families include:
- Must be resident of Arizona
- Have an income up to 400% of the current Federal Poverty Guidelines poverty or
- Have medical debt 5% or more of your estimated household annual income
Sesso says this is a multi-year contract so all the letters won’t be sent out at the same time, but it will be a process that occurs over a span of time.
“We haven’t even started sending out letters, but we are imminently starting,” explained Sesso. The letters will look distinct so Arizonans will know it’s not a scam. “It will have like the seal of the government on it. It will have a signature of the governor as well as mine. So, it will be very clear that it will come from the government initiative,” explained Sesso.
Sesso said hospitals understand that if people have debt hanging over their heads, they likely won’t get the care they need because they’re afraid of the financial burden, but she adds hospitals work with them to lift the burden.
Sesso said, “We want to really break the stigma around medical debt. We don’t want people to feel like they did something wrong because they ended up in medical debt.”
Click here to learn more about the initiative.
Undue Medical Debt-
Click here to learn more about the initiative-
March 2024, Governor announcement -https://www.youtube.com/watch?v=7-WqLGwg86s
