Connecticut will erase $1 billion in medical debt for eligible residents, Gov. Ned Lamont announced on Good Morning America Friday morning.
The relief, which would help an estimated 250,000 residents, will come from a $6.5 million fund from the COVID-era American Rescue Plan Act of 2021 that sought to cancel medical debt. The state will work with a nonprofit that buys medical debt at a reduced rate to eliminate the debt by June, according to the interview.
Connecticut residents at up to 400% of the federal poverty level, or $156,000 for a family of four, will be eligible, as well as those whose medical debt is over 5% of their income. The program will prioritize single parents, according to the report.
“This is not something they did because they were spending too much money, this is something because they got hit with a medical emergency,” Lamont said on the morning talk show. “They should not have to suffer twice — first with the illness, then with the debt.”
While a few cities have canceled medical debt, Connecticut will be the first state to do so.
Medical debt is the number one source of debt, according to the Consumer Finance Protection Board, affecting one in five U.S. households. The median amount of debt is about $2,000, according to the U.S. Census Bureau, with the burden falling more heavily on people of color.
The relief will be automatic, Lamont said, with no need for residents to apply because the nonprofits work directly with local hospital systems to purchase entire portfolios of debt.
“I think it’s really important that people have a sense that they can start building wealth of their own. We’re making that easier for people to do and the best way to start is by eliminating the debt that you’ve got,” Lamont said.
House Republican leader Vincent Candelora said Lamont’s move was likely to disappoint.
“The Governor’s celebratory lap over his move to use taxpayer dollars to pay off bad medical debt carried by hospitals is a slap in the face to residents and organizations who want adequate funding for government’s core functions but time and again see his administration and the Democrat-controlled legislature prioritize spending to support policies from their agenda that are far outside of that scope,” Candelora said in a statement Friday. “The Governor may enjoy the headlines he’s getting from this, but I have little doubt this policy decision will disappoint people with debt who don’t qualify for relief and frustrate organizations and officials as capitol conversation continues about meeting needs such as local special education costs, heating assistance for vulnerable residents, and investing in Medicaid rates for all residents.”
Lamont unveiled the plan in February of 2023, when he said he would use $20 million to cancel billions in medical debt.
“This initiative will not only help Connecticut residents who are saddled with debt financially, but it also lifts the significant emotional toll that this type of debt has on individuals who do not have the means to get out from under such crushing debt, especially for those who are simultaneously experiencing significant medical problems,” Lamont said at the time.
Gov. Lamont unveils plan to cancel billions in CT medical debt
