$1 Billion In Medical Debt To Be Canceled For CT Residents: Here's What To Know

CONNECTICUT — Gov. Ned Lamont said he plans to cancel $1 billion in medical debt for an estimated 250,000 eligible Connecticut residents.

The announcement came during an exclusive interview on ABC’s "Good Morning America" on Friday.

The bold move will make Connecticut the first state in the nation to erase medical debt for a sizable swath of residents.

"This is not something they did because they were spending too much money," Lamont said on the broadcast. "This is simply because they got hit with a medical emergency. They should not have to, you know, suffer twice — first with the illness and then with the debt."

The state will use $6.5 million in American Rescue Plan Act funds to pay off a nonprofit organization that buys medical debt at a reduced cost.

Connecticut residents whose household income is up to 400 percent of the federal poverty line — $156,000 annually for a family of four — or whose medical debt is 5 percent or more of their annual income will qualify for the relief.

Some 250,000 residents may expect to see their medical debt wiped out with the initial $6.5 million investment, the state said. More than 1 in 10 Connecticut residents have medical debt in collections.

Where do you go to apply? You don't. The contracted agency will work directly with the state to clear residents' medical debts automatically. The relief is expected to go into effect by June.

According to the Peterson KFF Health System Tracker, 23 million people, or nearly 1 in 10 adults, owe "significant" medical debt. Approximately 6 percent of adults in the U.S. owe over $1,000 in medical debt, and 1 percent of adults owe medical debt of more than $10,000.

House Republican Leader Vincent Candelora released the following statement Friday in response to Gov. Lamont’s interview on Good Morning America, where he discussed state policy to cancel medical debt:

House Republican Leader Vincent Candelora called Lamont's announcement "a slap in the face to residents and organizations who want adequate funding for government’s core functions."

"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," Candelora said in a statement released Friday.