PHOENIX (3TV/CBS 5) — Gov. Katie Hobbs announced on Tuesday new steps her administration is taking to tackle healthcare costs and the rising amount of medical debt impacting Arizonans.
The governor’s office is partnering with RIP Medical Debt to purchase up $200 million worth of medical debt from low to moderate income Arizonans. Eligible residents include those who make up to 400 percent of the poverty line or whose debt is equal to five percent of their income.
Additional details are expected to be added to the governor’s website shortly. Check back for updates.
Arizona’s Family has previously reported on “RIP Medical Debt” when SCAN Group, a not-for-profit health care and CareOregon purchased approximately $110 million of Arizonan’s medical debt in the summer of 2023 to clear up collection accounts. In that instance, $345,000 was paid to debt acquisition company RIP Medical Debt, which then bought those collection accounts for pennies on the dollar.
How big of a problem is medical debt in Arizona?
Insurmountable medical debt is a problem that not only affects Arizona but is a widespread problem in this country. According to a 2019 report, nearly one-third of all donations on GoFundMe go toward healthcare costs. Not only that, but a recent study done by consumer spending site ValuePenguin found that the average per-day hospital cost is $2,883. That data found that the average cost for a hospital stay in Arizona is about $14,103 or about 467 hours.
What steps has Arizona taken to address rising healthcare costs?
In 2022, voters overwhelmingly passed Prop 209, which decreased the amount of a debtor’s disposable income that could be garnished from wages. It also set a cap on the maximum interest rate for medical debt and increased exemption amounts of personal property that can’t be levied or seized by creditors. According to the Arizona Supreme Court website, those exemption rates are now adjusted to account for the rising cost of living.
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