- The move will eliminate approximately $1 billion for 250,000 state residents
- Democratic Gov. Ned Lamont today unveiled a plan to partner with a nonprofit that will “eliminate” the debt
Connecticut’s Democratic governor has unveiled a drastic plan to wipe out the medical debt of state residents, but has not yet revealed how he plans to pay for wiping out the $1 billion bill.
Governor Ned Lamont announced the Good Morning America plan today, unveiling a plan to partner with a nonprofit that will buy and “eliminate” medical debt at a lower cost.
The move would help an estimated 250,000 residents and will be helped by a $6.5 million fund from the American Rescue Plan Act, which aimed to cancel medical debt, he said.
‘This isn’t something they did because they spent too much money, this is something because they were struck by a medical emergency. They should not have to suffer twice: first from the disease and then from the debts.
“I think it’s really important that people feel like they can build their own wealth,” he said.
Governor Ned Lamont announced on Good Morning America that the state would roll out the measure later this year
“We make that easier for people and the best way to start is by eliminating the debt you have.”
Residents with a household income up to 400 percent of the federal poverty level, $124,800 per year for a family of four, or with debt equal to 5 percent of their annual income are eligible.
The initial $6.5 million from the American Rescue Plan Act is expected to help about 250,000 residents have their debts forgiven.
According to the state, households do not need to apply because the contracted agency will work with state agencies to automatically wipe their debts.
The state also said that 1 in 10 Connecticut residents have medical debt, which is also the leading source of debt for Americans.
The percentage of Americans who are part of a family that has trouble paying medical bills was 10.8 percent in 2021.
The above shows how many adults in debt have done the above to cover costs. Most said they had cut back on basic services to cover debts
A 2022 analysis of government data estimated that 9 percent of adults, or 23 million people, owed more than $250 in health care costs.
That same year, a Kaiser Health News poll exposed the crippling price of health care that many Americans face.
The survey surveyed more than 2,000 adults from across the country online or by telephone about their health care.
The survey found, among other things, that a quarter of Americans are currently struggling to pay off debts of more than $5,000 in medical or dental bills.
One in five also thinks they will never be able to cover the costs of the care they need.
The map above shows the areas in the US where the most people are in debt due to healthcare costs
And as many as one in seven said they had been denied access to hospitals because of outstanding medical bills.
Among Americans struggling with health care bills, the survey found that two-thirds said they would cut back on food, clothing and other basic necessities to pay medical bills.
Half admitted that they had used up all or most of their savings, which were intended for their retirement. And two in five said they had no choice but to take on extra work to cover the costs.
According to the study, Wyoming residents had the most debt, followed by Alaska and Utah.
Meanwhile, the states of Massachusetts, Minnesota and New York were counted as having the lowest medical debt.
While no state has announced such plans, New York City recently announced a plan to invest $18 million to eliminate $2 billion in medical debt for up to 500,000 eligible New Yorkers.
New Jersey included $10 million in their most recent budget to fund a pilot program to forgive medical debt.
Similarly, Colorado last year passed a law removing medical debt from credit reports, becoming the first state to enact such legislation.