Connecticut Moves to Cancel Medical Debt

( – Democrats managed to pass the American Rescue Plan of 2021 (ARP) without any support from Republican lawmakers. The $1.9 trillion economic stimulus bill allocated roughly $350 billion in aid to local and state governments. Connecticut’s Democratic governor, Ned Lamont, recently decided to leverage some of that taxpayer money to cancel medical debt in the state.

On February 2, Lamont appeared on “Good Morning America” to discuss his plan. He told ABC News national correspondent Stephanie Ramos that he planned to leverage $6.5 million in ARP funds to erase roughly $1 billion in outstanding medical debt this year. According to him, Connecticut will be the nation’s first state to take this radical step to help thousands of people struggling to pay their outstanding balances.

Lamont said Connecticut residents didn’t get into debt because “they were spending too much money.” Instead, they got “hit with a medical emergency” due to no fault of their own. The Democratic governor explained that “they shouldn’t have to suffer twice, first with [an] illness and then with the [accompanying] debt.”

ABC News provided additional details on Lamont’s plan in a separate article. The report explained that Connecticut plans to prioritize lower-income residents and single parents.

Looking at specifics, residents whose medical debt is 5% of their annual income and higher or with a household income up to four times the national poverty line will qualify for medical debt relief. The governor’s office hopes to roll out the plan over the next few months, and qualified residents should start receiving funds by June.

Connecticut officials plan to contract with a non-profit organization to administrate the program. That group purchases outstanding medical debt and cancels it at a reduced cost. Since the state uses that organization, qualified residents don’t have to apply for relief. The non-profit takes care of all the legwork by working with state agencies to automatically identify eligible individuals to eliminate their outstanding healthcare balances.

State officials claim that roughly a quarter of a million residents will have their medical debts erased this year. Lamont told GMA that this program will provide an opportunity for Connecticut residents to “start building wealth.” He says the best place to begin is by canceling their current debts.

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