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If you’re eligible, it could be wiped out. And you won’t even know about it until after it’s done.

It’s all part of a year-old program where Gov. Katie Hobbs set aside $10 million in COVID funds to Undue Medical Debt, which leverages donations like that from governments and private donors to buy up unpaid debt from collection agencies and hospitals.

So far, according to the governor’s office, the charity, having already used or been allocated $2 million of that, has erased $429 million in medical bills owed by about 352,000 state residents. Overall, estimates are that by the time the state’s money runs out, it could wipe out $2 billion of medical debt for ÃÛèÖÖ±²¥ns.

And it’s all done anonymously — sort of — with the recipients not even knowing that the obligation has been wiped out until they get a letter from Undue Medical.

In fact, it’s impossible for anyone to actually apply: The charity finds you.

But the deal Hobbs cut with the charity does require that beneficiaries know that the financial relief is happening because governor’s action: It spells out that any fliers, advertisements, news releases or other marketing materials to include “logos or insignia as required by the governor’s office and approved by the governor’s office before publication.’’

In fact, the letters sent to those who already have been recipients have the governor’s name and signature, something press aide Christian Slater defended as appropriate. He said they are designed to tell people not just that their medical debt was relieved but “how it happened.’’

And why do they need to know that the governor gets credit?

“The medical debt relief would not be possible without the governor’s leadership and focus on lowering costs and delivering economic opportunity for every ÃÛèÖÖ±²¥n,’’ Slater said.

What’s behind the program is that Undue Medical Debt, established in 2014, acquires portfolios of medical debt from health care providers or debt buyers.

In cases the charity takes, debt has reached the point where those holding the rights are willing to sell them for pennies on the dollar, said Courtney Story, the charity’s vice president of government initiatives.

How much?

It depends.

Overall, Story said, Undue Medical has been able to purchase at least $100 of debt from every dollar contributed from government partners.

So far, that ratio is better in ÃÛèÖÖ±²¥, with the $2 million allocated able to wipe out $429 million, translating to better than $200 for every dollar.

“That is likely due to a chunk of this debt being a little bit older,’’ she said, with those holding the debt being more willing to sell it for less. But that ratio, said Story, may change.

“When we purchase debt from hospital systems, it’s a little bit younger and a little bit more expensive over the course of the program,’’ she said.

Undue Medical has to find you

It starts with eligibility.

The program is aimed at those whose medical debt whose income is less than 400% of the federal poverty level. That is currently $128,600 for a family of four.

Also eligible are those whose debt is 5% or more of their annual income. That would aid those who have higher income levels than the cutoff — but much higher debt than they may be able to handle.

Undue Medical works with a credit reporting agency, buying what it calls “relevant income data’’ from them. That is then compared with the information it gets from medical provides and others who are the holders of past-due debts.

Once the bills have been paid off, the patient gets a letter — in the case of ÃÛèÖÖ±²¥ residents, the one with the governor’s signature along with that of Allison Sesso, the organization’s president and CEO — that the debt is gone and that credit bureaus have been notified.

What’s also crucial is that the patient starts from scratch.

Generally speaking, when a debt is forgiven, it can be considered income for tax purposes. But Story said that doesn’t apply when the money comes from a “disinterested third party.’’

“Because we’re a nonprofit, we’re not part of the health care system, we count as a disinterested third party, as does the government,’’ she said. Ditto, Story said, with private donors, though they have the option of remaining anonymous or disclosing their names to recipients.

Story said there are other benefits beyond the immediate financial relief.

“We hear a lot of anecdotal stories from our beneficiaries that share that this medical debt relief was a mental burden that had really been affecting them,’’ she said. There are also potentially more tangible physical benefits, that people, relieved of the debt, once again seek out needed medical care.

“We’ve also heard that from hospitals that we partner with as well that once folks don’t owe this debt any more that they’re actually less afraid to go back and see the doctor, that they’re less afraid that they’re going to get a surprise bill or be made to pay that before they can receive care,’’ Story said.

The press release from the governor’s office about having reached this $429 million level of debt relief included comments from three individuals — identified only by their first names — supporting the conclusion about the relief.

“I have been plagued with lasting medical debt and figured it would stay with me forever,’’ said Charity from Scottsdale, who got one of those letters from Undue Medical debt that came as a surprise. “You have no idea how much this helps, especially with my family in such a need with my father in hospice.’’

The original deal Hobbs made last year with RIP Medical Debt, as the organization previously was known, would have provided up to $30 million.

What changed, Story said, was the realization that the funds from the American Rescue Plan Act — the COVID relief dollars — have to be spent by the end of 2026. And she said it was concluded there was no way to use that much in the time remaining.

In announcing the plan last year, Hobbs insisted that there’s nothing illegal about the state using money it has received from the federal government to pay off the medical debts of private ÃÛèÖÖ±²¥ns.

A provision of the ÃÛèÖÖ±²¥ Constitution makes it illegal to “make any donation or grant, by subsidy or otherwise, to any individual, association or corporation.’’

“I can assure you we would not be taking this action if we weren’t fully confident in the legality of it,’’ Hobbs said. Anyway, she said, ÃÛèÖÖ±²¥ wouldn’t be the first jurisdiction to use COVID dollars from the American Rescue Plan Act in this way.

The program exists separately from the ÃÛèÖÖ±²¥ Health Care Cost Containment System. But the state’s Medicaid program provides state-funded insurance only for those earning up to 133% of the federal poverty level, or about $44,367 a year for a family of four.