What Does Arizona Prop 209 Mean for Your Medical Bills
The 2022 midterm elections resulted in several changes to Arizona law. One of the new propositions, Prop 209, also known as the Predatory Debt Collection Act, sets limits on interest rates charged on medical debt.
Interest rates, including those attached to medical bills, are largely influenced by your credit score. A higher credit score shows a greater ability to pay off debt. When applied to medical bills, this means that the less a lender believes in your financial ability to return money borrowed, even for necessary medical expenses, the more they charge you.
In the U.S., 59 percent of bankruptcy filers attribute their bankruptcy to medical debt. In Arizona, more than one in four Arizonians have medical debt in collections.
Prop 209 received a large amount of support, with an estimated 72 percent of voters approving the proposition.
How Is Medical Debt Collected
Debt collection goes through several steps. When you have an outstanding debt due to a hospital or other institution, a debt collector or agency may take on the debt. The agency or collector will then become responsible for contacting you. In some cases, the debt collector may report delinquency to credit bureaus, lowering your credit score.
There is a time limit for debt collectors. In Arizona, the statute of limitations on medical debt runs out after six years. A debt collector must take you to court before then.
What Does Prop 209 Do
Prop 209 protects Arizonians from all predatory debt collection practices, not just medical ones, though its impact on medical debt collections was the highest priority. It will do this through a few measures, including increasing protected values of homes and vehicles. Primarily, it protects you by increasing the amount of your property that is exempt from debt collection. Following the introduction of Prop 209:
- The amount of a homestead exempt from debt collection increased to $400,000
- The value of household furnishings exempt from debt collection increased to $15,000
- If you or your dependent have a disability, the value of household furnishings exempt from debt collection increases to $25,000
- The amount of money in your bank account exempt from debt collection increased to $5,000
Following Prop 209, debt collectors are only allowed to collect 10 percent of your disposable income or 60 times the minimum wage, depending on which is higher. Prop 209 also placed a limit on the interest rate for medical debt, setting the limit at no more than three percent.
The increased values in the initiative were designed to match the yearly increase in the cost of living.
Who Supported Prop 209
Prop 209 was widely popular and there were few prominent campaigns against it. There were several outside interests that advocated for it by donating large sums of money in support of the proposition. It received financial contributions from several sources, including The Arizonians Fed Up With Failing Healthcare PAC, SEIU United Healthcare Workers and Healthcare Rising Arizona. SEIU United Healthcare Workers donated the greatest sum of money to campaigns for Prop 209.
What Does This Mean for Past Medical Bills
Unfortunately, Prop 209 does not retroactively previously paid medical debts.
Phoenix Lawyers Committed to Protecting Arizonans from Medical Debit
Injury accidents of all types are one of the most common causes of excessive medical debt. The people who cause those accidents should be forced to cover the medical bills – not the innocent victims. If you were injured by someone else’s negligence, you may be entitled to compensation for your medical care, lost wages and pain and suffering.
We have sought out Phoenix lawyers who have proven themselves in court and won’t encourage you to settle when it’s not in your interest to do so. All the lawyers listed on our site have a record of success in court and are highly rated.
