Connecticut Governor Ned Lamont announced on Friday that the state intends to become the first in the nation to eliminate medical debt for eligible residents, alleviating approximately $1 billion in medical bills using $6.5 million from the COVID-era American Rescue Plan Act.
During an appearance on ABC News’ “Good Morning America,” Lamont emphasized that individuals burdened by medical bills “should not have to suffer twice — first with the illness, then with the debt.”
Lamont’s strategy involves utilizing funds from the 2021 Rescue Plan to engage a nonprofit organization in purchasing medical debt and absolving it at a reduced cost. This process mirrors the practices of for-profit debt collection agencies, with the distinction that the nonprofit organization notifies individuals of the debt cancellation instead of pursuing debt collection.
Under the program, Connecticut residents qualify if their household income does not exceed 400% of the federal poverty line, which is just under $125,000 annually for a family of four. Additionally, residents whose medical debt comprises 5% or more of their yearly income are eligible for debt cancellation.
The initial investment of $6.5 million is projected to relieve the debts of 250,000 residents across the state.
Connecticut’s initiative to cancel medical debt precedes similar efforts in New York City, where officials announced last month a commitment of $18 million to erase $2 billion in medical debt for up to half a million qualifying residents over the next three years.
