Voters overwhelmingly back medical debt ballot measure

More than one in four Arizonans have medical debt in collections, and voters appear have approved a reprieve for them. 

With 75% in support of Proposition 209 and just 24% opposed, the Associated Press called the race. The measure, known as the Predatory Debt Collection Act, aims to restructure how medical debt is collected in favor of the indebted party by cutting down on yearly interest rates and increasing the amount of assets protected from creditors. 

Rodd McLeod, a spokesman for Healthcare Rising Arizona, which spearheaded the campaign for the proposal, said that while many votes remain to count, the early results are a clear signal that Arizonans are concerned about medical debt. 

“We’re optimistic that Arizona voters have decided that medical debt is a real problem and we need to do something about it,” he said. 

For Liz Gorski, a member of Healthcare Rising Arizona and a strong advocate for medical debt collection reform after a car accident left her with thousands of dollars in medical debt, the passage of Prop. 209 would mean other indebted people would be able to breathe freely. 

“It would mean that you can actually stay in your house, keep your car and not have to work three jobs and still not get by,” she said. “People might even look to get another job and not have to work under the table to avoid the interest. They won’t have that fear hanging over their head.”

Prop. 209 would reduce the maximum interest rates that could be collected from 10% to 3% annually. Currently, up to 25% of wages can be garnished by creditors, but Prop. 209 would limit that to just 10%. Courts would also be allowed to reduce the amounts being garnished in cases of extreme economic hardship, a power they don’t currently have.

Assets like homes, household furnishings, vehicles and bank accounts would be further shored up against collection or forced sale starting in 2024. The value of a home protected from creditors would be increased from $250,000 to $400,000, while the money in bank accounts safeguarded against seizure would be $5,000 — a dramatic increase from the current $300. 

The measure has come under fire from opponents as being influenced by outside entities. A California-based union, SEIU United Healthcare Workers West, registered in support of Prop. 209 and contributed $500,000 to the campaign. 

Opponents of the measure, which include creditor groups, have warned that limiting the options for creditors to collect on the debt will ultimately harm consumers by leading to shrinking opportunities for credit, shorter payment plans and increased interest rates. It doesn’t address the core issue, critics added, which is that medical costs are simply too high. Shifting the blame onto creditors will only hurt the lending market and Arizonans seeking credit or even financing for medical care. 

Supporters of the measure, meanwhile, argued that the proposition is fair and would reduce the impact on struggling families as they deal with skyrocketing inflation and costs of living increases. Predatory debt collection only worsens that reality, especially for minorities and low income Arizonans. The average Arizonan with medical debt has $1,903 in collections and while 20% of white Arizonans have medical debt in collections, that number for communities of color is much higher at 39%.

***UPDATE: This story and headline have been updated to reflect the AP calling the race. The original headline was “Voters overwhelmingly back medical debt ballot measure.”