Lamont proposal would cancel billions in Connecticut medical debts

Gov. Ned Lamont is planning to propose the cancellation of overdue medical debts for thousands of Connecticut residents.

According to a statement from the governor”™s office, the state will invest $20 million in federal Covid-19 recovery funding it received from the American Rescue Plan Act for a contract with a nonprofit organization that will buy medical debt directly from hospitals and eliminate it at a fraction of the original cost. Eligible households will not need to go through an application process to qualify for this service.

The Lamont administration estimated this initiative will cost $20 million and could eliminate about $2 billion in medical debt for Connecticut residents; the governor did not identify which nonprofit would be part of this initiative. The proposal will be part of Lamont”™s fiscal years 2024 and 2025 biennial state budget proposal, which he will present to the General Assembly next week.

“Several state and local governments have seen significant success at canceling medical debt for their residents using this model, and I think this is absolutely the right way to use this Covid-recovery funding,” Governor Lamont said. “This initiative will not only help Connecticut residents who are saddled with debt financially, but it also lifts the significant emotional toll that this type of debt has on individuals who do not have the means to get out, especially for those who are simultaneously experiencing significant medical problems. This debt erasure will put millions of dollars back into the Connecticut economy and provide an economic stimulus to local communities.”