Arizona's governor has erased over $1 billion in medical debt for more than 670,000 residents through an automatic relief program. The Arizona Governor Office announced in August 2026 that the "Affordable Arizona" program, launched in March 2024, represents the largest state-level medical debt forgiveness effort in the United States. Most eligible Arizonans already received their debt relief without taking any action. The nonprofit Undue Medical Debt identified qualifying residents from hospital and healthcare provider debt portfolios and sent notifications starting in August 2026, erasing entire balances automatically without requiring recipients to apply or claim the benefit.
Table of Contents
- Who Qualifies for Debt Relief
- How the Debt Forgiveness Works
- The Scale of Relief Already Delivered
- If You Haven't Received Notification Yet
- Frequently Asked Questions
Who Qualifies for Debt Relief
You qualify if your household income is at or below 400% of the federal poverty level—approximately $125,000 for a family of four—or if your medical debt alone equals at least 5% of your annual income. According to the program's eligibility guidelines, no application is necessary to receive relief.
The program identifies eligible residents through existing debt records held by hospitals, healthcare providers, and debt collection agencies. Once found, you receive a notification letter in the mail confirming that your debt has been purchased and forgiven. You don't need to prove income or eligibility; the nonprofit's analysis of medical and income data in the debt portfolios determines who qualifies.
How the Debt Forgiveness Works
The nonprofit Undue medical Debt purchases medical debt portfolios directly from healthcare institutions and debt collectors for a fraction of face value—typically spending $100 to acquire and forgive $10,000 in medical debt. Once purchased, the organization forgives the entire amount, eliminating it completely rather than restructuring payments or settling the claim.
This model stretches the program's $30 million initial funding significantly. The state allocated federal COVID-19 relief funds exclusively for the program, meaning it required no state tax dollars or legislative appropriation.
The Scale of Relief Already Delivered
As of August 2026, the program had forgiven $1 billion in medical debt for 670,963 Arizonans. The pace of relief accelerated sharply: by December 2025, the program had reached $642 million forgiven for nearly 500,000 residents, meaning the remaining $358 million was forgiven in just eight months. Governor Hobbs authorized the purchase of up to $2 billion in total medical debt, suggesting significant room for additional eligible residents beyond the current milestone. The program continues purchasing debt portfolios in phases, with ongoing notifications likely to reach more Arizonans in coming months.
If You Haven't Received Notification Yet
If you believe you qualify but haven't received a letter, your medical debt may still be in a portfolio the program hasn't purchased. The program began sending notifications in August 2026 but is purchasing debt in phases—your relief may come later depending on which healthcare institution or debt collector holds your account. Contact the Arizona Governor's Office through their medical debt relief resources if you have questions about your status. If you qualify, you need not take any action to claim relief; once your debt is purchased by Undue Medical Debt, it is automatically forgiven without your participation.
Frequently Asked Questions
Do I have to apply for Arizona medical debt relief?
No. If you qualify, Undue Medical Debt identifies you automatically from existing debt records and sends you a letter. No application or proof of eligibility is required.
What if my income is slightly above the 400% poverty threshold?
You may still qualify if your medical debt alone equals at least 5% of your annual household income. For example, a family earning $130,000 annually would qualify if they owe $6,500 or more in medical bills.
Is there a cap on how much debt can be forgiven per household?
No cap per household exists. The entire balance of medical debt identified in the program's purchased portfolios is forgiven, though relief is limited to debt already held in portfolios Undue Medical Debt has purchased.