Arizona Medical Debt Collection Initiative Likely Heading to Ballot for November Election

An organization seeking to put a measure on the ballot in Arizona this November that would increase the amounts that consumers can shield from garnishments to pay medical debts while also lowering the judgment interest rate on medical debt turned in twice as many signatures as needed last week, and is “likely” headed to the ballot, according to a published report.

Healthcare Rising Arizona needs 237,645 valid signatures to get its measure added to the ballot (that total represents 10% of the total votes that were cast for governor in the preceding election). They turned in 472,296 signatures to the Arizona Secretary of State, which is charged with reviewing and approving the petitions. Barring a successful court challenge, it looks like voters in Arizona will get a say in establishing regulations that govern how debts in their state are collected.

The Arizona Chamber of Commerce & Industry and the Greater Phoenix Chamber have announced their opposition to the initiative, and are spotlighting the potentially negative consequences that could result if the measure is added to the ballot and a majority of voters approve it.

“When lenders can’t collect outstanding debts, they’ll pass their losses onto their other customers, which means higher interest rates for everyday Arizonans,” said Danny Seiden, the president and chief executive of the Arizona chamber. “At a time of sky-high inflation, do we really want even higher interest rates?”

If enacted, the initiative would raise the homestead exemption to $400,000 from $150,000, would ban garnishing the wages of anyone earning less than $50,000 per year — with annual increases, and raise the exemption threshold in bank accounts to $5,000 from $300. Judgment interest rates on unpaid medical debts would be capped at 3%. The new law would also eliminate up to 70% of existing garnishments.

“We are working to protect the interests of Arizona small businesses and our community from another attempt by a California political organization to remake Arizona into their image,” said Amber Russo, of Kino Financial, who is also a member of the Board of Directors for RMA International, and a spokesperson for Protect Our Arizona, a group opposing the initiative. “Arizonans have been hit hard by the current economy and taking away access to credit will result in even tougher times for hardworking families.”

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