Financial relief will help restore Arizona Promise for working class Arizonans, Beneficiaries to receive letters in mail notifying them of debt cancellation

Phoenix, AZ - On July 16, 2025, Governor Katie Hobbs announced that $429 million in medical debt has been erased for more than 352,000 Arizonans. This effort, which is a partnership between the Hobbs administration and the national nonprofit Undue Medical Debt, works to create pathways to economic stability and improve health outcomes for working class Arizonans.

“Economic stability is core to the Arizona Promise,” said Governor Katie Hobbs. “We’ve taken bold action to free Arizonans across the state from crushing medical debt. Medical debt deprives our fellow Arizonans of their basic dignity, prevents our families and neighbors from living happy and productive lives, and endangers the Arizona Promise. By erasing debt for hundreds of thousands of people across our state, we are creating pathways to economic security and empowering them to realize their full potential.”

Last year, Governor Hobbs announced a historic initiative to erase $2 billion in medical debt for up to one million Arizonans. The state made American Rescue Plan Act funds available to Undue Medical Debt to purchase debt from providers like hospitals and collection agencies for pennies on the dollar and cancel the balance.

There is no application process for this program. Arizonans eligible for debt relief include individuals who earn 400% of the Federal Poverty Level or below and/or individuals who owe at least 5% of their annual income for outstanding medical bills. Program beneficiaries receive a branded letter in the mail from Undue Medical Debt notifying them that some or all of their debt has been erased. The envelope appears like this:

A wave of debt relief letters has already arrived in people’s mailboxes, and additional program beneficiaries will receive letters in the next few weeks.

“We’re thrilled to partner with Governor Hobbs and the state of Arizona on this transformative medical debt relief program that is bringing financial and emotional relief to hundreds of thousands of Arizonans,” said Undue Medical Debt CEO and president Allison Sesso. “Medical debt is a burden that often prevents people from seeking necessary care simply because they got sick, were in an accident or were born with a chronic condition. This investment demonstrates Arizona's commitment to ensuring that no one should face financial ruin for seeking care, and we're grateful to work with providers across the state who recognize that removing these unpayable debts of necessity helps their communities thrive.”

“I have been plagued with lasting medical debt and figured it would stay with me forever. I received the letter from Undue Medical Debt, and I couldn't have been more surprised, more thankful, and more blessed that this particular debt has been paid in full because of this generosity. You have no idea how much this helps, especially with my family in such a time of need with my father in hospice. Thank you from the bottom of my heart. God bless you!,” said Charity from Scottsdale, AZ, one of more than 352,000 Arizonans who had medical debt abolished.

“This is a huge blessing. My wife and I have been paying off our debt for years. Having raised four kids, life comes with a lot of unexpected debt [even] health issues for the whole family. Being self-employed [meant] affordable health insurance was next to impossible. We have been taken advantage of a couple of times by paying large premiums to only receive minimal coverage. Undue Medical Debt has [provided us a] huge relief now that we are closer to getting back on track,” said Jordan from Surprise, AZ, one of more than 352,000 Arizonans who had medical debt abolished.

“For years, I've been juggling the weight of medical bills, each one stacking higher than the last. Between treatment and the constant care for my mom, who has been disabled for the past ten years, it felt like we were sinking financially. I'd wake up every day with a tight chest, trying to manage the impossible: work, care for my mom, and keep up with bills, including debt that seemed insurmountable. Then I got a wonderful letter from Undue Medical Debt. I can't explain what a relief it was to receive [this] letter, telling me I am free from a medical debt. I began to feel lighter and to know that they didn't help just me, but they also helped others in [a] similar position as me. It's genuinely a blessing. Thank you Undue Medical Debt for clearing me of my worries!” said Corina from Phoenix, AZ, one of more than 352,000 Arizonans who had medical debt abolished.