CT to begin erasing medical debt for eligible residents

Connecticut will use funding from the American Rescue Plan Act this year to forgive medical debt for an estimated quarter million state residents, according to Gov. Ned Lamont’s office.

Last session, lawmakers approved $6.5 million in the state budget toward erasing eligible residents’ medical debt. Using the federal pandemic relief, Connecticut will partner with a nonprofit that buys medical debt for a small amount of the cost. The state is still in the process of contracting with a vendor, a spokesperson for Lamont’s office said.

On Friday, Lamont touted the upcoming relief on ABC’s Good Morning America.

“I think it’s really important that people have a sense that they can start building wealth of their own,” Lamont said . “We’re making that easier for people to do. And the best way to start is [to] eliminate the debt you’ve got.”

Four in 10 adults have medical debt in the U.S., according to KFF health policy data. A disproportionate number of those affected by medical debt are Black and Hispanic.

State residents whose medical debt is over 5% of their income, or who earn up to four times the federal poverty line, will be eligible for the relief. Those individuals could be notified as early as this summer, according to Lamont’s office.

There is no application process for debt cancellation, Lamont’s office said. The chosen vendor will examine hospitals’ large portfolios of debt that meet eligibility criteria.