Connecticut's first-in-the-nation statewide plan to erase $1 billion in medical debt for eligible residents is getting national notice.
Gov. Ned Lamont highlighted the plan, which became law in 2023 and will be implemented this year, on ABC's Good Morning America Friday.
The roll-out will first impact single parents and lower-income residents, starting this summer. "They got hit with a medical emergency," Gov. Lamont told ABC. "They should not have to suffer twice: first with the illness, then with the debt."
The state is using $6.5 million in federal COVID relief funds to contract with a nonprofit organization that buys medical debt from hospitals and eliminates it at a fraction of the cost. Recipients do no need to apply. Eligible residents will receive letters in the mail saying their debt has been cancelled.
According to the state, residents are eligible if their household income is up to 400% of the federal poverty line, or if their medical debt equates to at least 5% of their annual income. This could impact about 250,000 people.
The governor's office explains in a statement, "More than 1 in 10 Connecticut residents have medical debt in collections. That’s debt staining their credit reports, eating up their savings, and preventing them from being successful. With Black families carrying nearly 11% more of those debts than White families – and Latino families carrying nearly 4% more – medical debt is bigger than economics, it’s about equity, justice, and most of all, opportunity."
"The best way to start (building wealth) is eliminate the debt you've got," says the governor.