By Howard Fischer
Capitol Media Services
PHOENIX -- The program announced earlier this month to retire medical debt was promoted as providing anonymous relief to thousands of Arizonans.
But it turns out the contract negotiated with RIP Medical Debt by Gov. Katie Hobbs actually is going to inform the recipients their debt has been wiped out with a letter approved by the governor's office.
And just so there is no question about who should get credit, the deal requires any fliers, advertisements, press releases or other marketing material to include "logos or insignia as required by the governor's office and approved by the governor's office before publication.''
That is at sharp contrast to how the process was described by Jeff Smedsrud, a member of the RIP board, when he stood next to Hobbs at a press conference on March 4.
He explained how RIP finds eligible people with medical debt by working with a credit bureau. It provides RIP with a list of those whose income is less than 400% of the federal poverty level -- $124,800 for a family of four -- or whose debt is more than 5% of their annual income.
Then his company negotiates with the providers to whom the money is owed, and finds a way to pay it off, often with just pennies on the dollar. That, he said, is how his company can use up to $30 million that Hobbs is earmarking in federal COVID relief funds to retire up to $2 billion in medical debt.
"We send out a notice to everybody in that database that meets those definitions,'' said Smedsrud, who also is a Scottsdale resident.
"It just says, 'Good news, your medical debt is gone. It's a non-taxable event because it was done anonymously. We've notified the credit bureaus. Your scores should improve. Get back into the health care system,' '' he said.
Smedsrud said he couldn't say how many Arizonans will get relief -- and one of these letters.
"We use words like 'approximate' because we don't exactly know how many people,'' he said. Some of it depends on how much each dollar from the COVID funds can leverage in debt relief.
"But it's big,'' Smedsrud said. "It's very, very large.''
Hobbs press aide Christian Slater said he doesn't understand why including her name in any materials and disclosure to recipients of who provided the debt relief is a big deal.
"Because it is because of the governor,'' he said of the program. Slater said the letter is designed to tell people not just that their medical debt was relieved but also "how it happened.''
And why do they need to know that the governor gets credit?
"Because that's the truth,'' he said.
As to the issue of this being anonymous, Slater said that has nothing to do with the source of the funds but instead protects the recipients.
"It's not like a public list of people who are affected by it,'' he said.
But that doesn't mean the governor won't get a list of at least some of those whose debt was paid off -- and be able to use it in some way.
For example, the contract says the letter that will go out to those who get the debt relief will request recipients share their stories.
"Patient stories and related insights shall be shared with the governor's office on a regular basis,'' the it reads.
Daniel Lempert, a spokesman for RIP, said this is voluntary on the part of recipients who are asked if they'd like to share their information.
"These are typically shared on social media or read at press events,'' he said. "They're very simple messages most of the time,'' Lempert said.
As to what the governor can do with those names or testimonials?
"To my knowledge there isn't a restriction on how they can be used.''
If putting the governor's name on messages going out to those who are getting financial relief sounds familiar, it should.
Hobbs last year claimed credit for a $260 million tax rebate that went out to families, a rebate that she didn't want in the budget in the first place.
"Governor Hobbs puts money back into Arizonans' pockets,'' said her press release. And there even was a video of the governor talking about the rebate.
But it didn't stop there. The letter that went to recipients of the rebate announced that it was "a result of this administration's 2023 bipartisan budget.
"And we could not be more excited to put money back into your pocket,'' it reads.
And if there was any doubt about Hobbs seeking credit, the letter directed taxpayers to "www.azgovernor.gov'' which is the governor's web site.
Only thing is the legislation authorizing the rebate was designed to keep the Democratic governor from taking credit.
"No letter relating to the Arizona families tax rebate issued under this section shall be sent from the governor's office, be sent on the governor's letterhead or reference the governor's office,'' the law reads.
Slater on Wednesday defended that act, too.
"The governor did sign the tax relief into law,'' he said.
The contract with RIP does have some other provisions that could raise questions.
There also is a requirement -- demanded by the governor's office -- that it get a description of how the program is "primarily serving disadvantaged communities.'' That, however, appears to be at odds with how Smedsrud said the program works.
"We don't pick elderly people versus younger people, people of color versus not,'' he said.
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