Connecticut has said that it will cancel medical debt for thousands of residents. To be eligible, residents should have medical debt equal to at least 5% of their annual income, or they should have a household income up to 400% of the federal poverty line, ABC7 reported.
Those who are eligible do not need to apply to have their medical debt cleared. The state will use $6.5 million in COVID-19 relief funds from the 2021 American Rescue Plan Act to cancel about $1 billion in medical debt, Good Morning America reported.
The state plans to achieve this by working with a nonprofit that eliminates medical debt at a lower cost. Gov. Ned Lamont spoke to Good Morning America about how having medical debt is not the result of bad spending habits — it happens to many because of unexpected (and costly) medical expenses.
According to KFF, about 1 in 10 adults in the US have medical debt. In 2022, KFF reported that 41% of Americans had health care debt (medical and/or dental) and another 16% said they've had health care debt within the past five years.
"This is not something they did because they were spending too much money, this is something because they got hit with a medical emergency," Lamont said to Good Morning America. "They should not have to suffer twice — first with the illness, then with the debt."
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Other communities have also used American Rescue Plan Act funds to forgive medical debt. Cook County, Illinois; Toledo and Lucas counties, Ohio; New Orleans, Louisiana; and Pittsburgh, Pennsylvania are among the communities that have used these funds to eliminate medical debt, according to the White House.
Connecticut says it will be the first state to do so.
