Arizona voters handily approved a union-backed initiative that will limit debt collectors’ ability to go after residents for unpaid medical bills.
The proposal’s success could serve as a model for progressives in other Republican-led states hoping to get favored policy prescriptions enacted without the involvement of GOP legislators and governors.
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The Predatory Debt Collection Act will reduce the maximum interest rates creditors can charge on outstanding medical bills to 3%, down from the current threshold of 10%. It will also raise the value of assets protected from debt collection, which proponents argued would protect people from facing bankruptcy or poverty due to late medical bills.
The proposal was partially financed by the SEIU United Healthcare Workers, a California healthcare union that contributed around $8 million to the primary PAC supporting the proposition. The union also backed a dialysis ballot measure in California that would impose new rules on kidney dialysis clinics across the state.
The policy will likely affect the roughly 12% of Arizona residents that have medical debt, owing an average of $719, according to an analysis from the Urban Institute.
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Opponents of the proposal decried it as an anti-business policy. Amber Russo, a spokeswoman for the lead opponent of the measure, the political action committee Protect Our Arizona, warned that the proposal could be applied to outstanding bills outside of the medical realm.
“Landlords that are unable to collect the money owed to them from ‘bad’ tenants will shift the cost of damages and broken leases to the ‘good’ renters in the form of higher rents,” Russo said.
