Gov. Lamont Proposes Ending $2 Billion In CT Medical Debt: Here's How

CONNECTICUT — Gov. Ned Lamont proposed eliminating an estimated $2 billion in medical debt for Connecticut residents by using federal COVID-19 recovery funds to purchase debt from hospital systems.

The proposal would take $20 million from the state’s American Rescue Plan Act funds and contract with a nonprofit organization that would buy medical debt for pennies on the dollar in order to cancel it.

There would be no application process for eligible households to have their debt canceled, and the cancellation wouldn’t saddle households with tax burdens, Lamont said.

“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,” Lamont said in a statement.

The City of Toledo and Luca County in Ohio gave $1.6 million to a nonprofit that purchased an estimated $240 million in medical debt, according to Governing.

About 19 percent of American households carry some medical debt and the median amount owed is $2,000, according to the U.S. Census Bureau.