Governor Ned Lamont today announced that nearly 23,000 Connecticut residents who have medical debt will be notified in the coming days that some or all of that debt has been eliminated under the first round of a major initiative his administration launched through a partnership with the national nonprofit organization Undue Medical Debt.
The nonprofit contracts with state and local governments and leverages public investments to negotiate with hospitals and other providers on the elimination of large, bundled portfolios of qualifying medical debt owed by patients whose income is at or below four times (400%) the federal poverty level or who have medical debt that is 5% or more of their income. (The current federal poverty level is an annual income at or below $31,200 for a family of four.) Because these medical debts are acquired in bulk and belong to those least able to pay, they cost a fraction of their face value.
Under this first round, the Lamont administration invested approximately $100,000 from the state’s allocation of American Rescue Plan Act (ARPA) funding, and Undue Medical Debt was able to negotiate with a secondary market partner (i.e. collections agency) and a national provider to acquire approximately $30 million in qualifying medical debt for Connecticut residents.
There is no application process for this medical debt relief and it cannot be requested. Instead, residents whose debt has been identified for relief will receive a branded letter from Undue Medical Debt indicating which debt or debts have been eliminated. Letters under this first round will be delivered to Connecticut residents through the U.S. mail beginning December 23, 2024.
Governor Lamont said that his administration intends on continuing to partner with Undue Medical Debt to enact further rounds of medical debt elimination. The governor and the Connecticut General Assembly worked together to make $6.5 million in ARPA funding available for this initiative.
“Medical debt comes to patients at an extraordinarily difficult time when they are dealing with serious health ailments, and it can frequently follow them around for decades and impact nearly every aspect of their lives,” Governor Lamont said. “This erasure will lift the significant emotional toll that this type of debt has on individuals who do not have the means to get out from under their debt, especially for those who are simultaneously experiencing significant medical problems. This first round will provide relief for thousands of Connecticut residents, and I am hopeful that by continuing this partnership with Undue Medical Debt, we can help thousands more Connecticut residents get their debt relieved.”
“We’re very grateful to the State of Connecticut for this sizable investment in medical debt relief and I’m glad this first round of letters is landing in time for the holiday season,” Allison Sesso, CEO and president of Undue Medical Debt CEO and president said. “Debt relief is only one, albeit important, piece of the puzzle in removing an emotional and financial burden on families. I’m very glad that Governor Lamont has also committed to upstream solutions by way of legislation to ensure medical debts do not negatively impact one’s credit score.”
In addition to this initiative, Governor Lamont recently signed legislation enacting a law that prohibits health care providers and hospitals in Connecticut from reporting a person’s medical debt to credit rating agencies for use in credit reports. That new law – which went into effect on July 1, 2024 – was enacted to protect patients who may have otherwise been apprehensive about seeking essential medical care for fear that any inability to pay could negatively impact their credit rating.
