The governor of Connecticut has announced a plan to cancel $650 million in medical debt for as many as 250,000 residents of The Nutmeg State, which would make it the first state to offer this type of relief. While Connecticut may be the first state to actually go through with the process of canceling medical debts for its residents, it would join a number of local governments that have already done so, and likely will be followed by other states that pledge to use economic relief funds from the COVID-19 pandemic to purchase and forgive the debts.
The Who: Residents who have medical debt that equals 5% or more of their annual income or whose household income is up to 400% of the federal poverty level would be eligible to have their debts forgiven, according to Gov. Ned Lamont’s plan.
The How: The state will use $6.5 million from the 2021 American Rescue Plan to purchase the debt and will use the charitable organization, RIP Medical Debt, to facilitate the purchase, to select which residents will have their debts forgiven, and to provide notification to those individuals.
The Race: New Jersey has also earmarked funds — $10 million — to purchase and forgive medical debt for Garden State residents. It now just appears to be a race to see who actually gets it done first.
The Other Side: Republicans in Connecticut were quick to criticize the governor’s plan. “The Governor’s celebratory lap over his move to use taxpayer dollars to pay off bad medical debt carried by hospitals is a slap in the face to residents and organizations who want adequate funding for government’s core functions but time and again see his administration and the Democrat-controlled legislature prioritize spending to support policies from their agenda that are far outside of that scope,” said House leader Vincent Candelora, a Republican, in a statement. “The Governor may enjoy the headlines he’s getting from this, but I have little doubt this policy decision will disappoint people with debt who don’t qualify for relief and frustrate organizations and officials as capitol conversation continues about meeting needs such as local special education costs, heating assistance for vulnerable residents, and investing in Medicaid rates for all residents.”
