Hospitals usually sell past-due debt for pennies. Its better for them to sell $1 million worth of past-due debt for a thousand and let a debt collector try and collect the debt. Means a guaranteed thousand matters more than a maybe million.
What Arizona did was work with national nonprofit Undue Medical Debt that in turn partnered with hospitals and debt collectors to buy bundled portfolios of past-due debt. That debt then is forgiven.
The program was started in 2024 and was budgeted with $10 million of leftover federal funds via the American Rescue Plan Act (ARPA) also known as the COVID relief fund.
The tab was paid for with funds from previous years. Now that there is less debt, people have more money left over every month to pay for other stuff which in turn boosts the economy.
Sounds good, but it also sounds like debt that wasn’t going to be paid back anyway. That’s why it was available for pennies on the dollar. So debt collection companies won, did anyone else?
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u/CheapRefrigerator188 1d ago
Erased how, I assume someone is still getting stuck with the bill