Lamont Announces Elimination Of Medical Debt

From Governor’s Office:

Governor Ned Lamont today announced that letters are being mailed this week to more than 100,000 Connecticut residents notifying them that some or all of their medical debt has been eliminated under the second round of an initiative his administration launched last year through a partnership with the nonprofit organization Undue Medical Debt.

Under the partnership, Undue Medical Debt is leveraging investments from the state to negotiate with hospitals and other providers on the elimination of large, bundled portfolios of qualifying medical debt owed by Connecticut patients. Those who qualify must have income at or below four times (400%) the federal poverty level or have medical debt that is 5% or more of their income. (The current federal poverty level is an annual income at or below $32,150 for a family of four.) Since these medical debts are acquired in bulk and belong to those least able to pay, they cost a fraction of their face value, often pennies on the dollar.

In this second round, the state invested $575,000 in American Rescue Plan Act (ARPA) funding, and Undue Medical Debt was able to negotiate with a secondary market partner to acquire and eliminate more than $100 million in qualifying medical debt. The first round occurred in December and saw the elimination of approximately $30 million in medical debt for 23,000 of the state’s residents.

Those who have been identified for relief will receive a branded envelope and letter from Undue Medical Debt in the mail over the next several days. (To view a sample of what this letter looks like, click here.)

“Medical debt causes additional anxiety and stress when individuals and families are coping with potentially life-threatening health situations,” Governor Lamont said. “Over the next few days, more than 100,000 Connecticut residents who have been struggling to pay their medical bills will feel relief when they receive letters in the mail notifying them that their debt has been erased. I am hopeful that additional medical partners will soon sign onto this program to help more Connecticut families through further rounds of this initiative.”

“I’m very grateful for the State of Connecticut’s continued partnership in providing medical debt relief to its residents,” Allison Sesso, CEO and president of Undue Medical Debt, said. “The erasure of these debts of necessity wouldn’t be possible without community-minded leaders like Governor Lamont and his team, who believe medical debt should not be a hindrance to seeking needed care. We look forward to continuing our work in the state so families can seek healthcare with dignity.”

“Medical debt can be a crippling burden on patients, especially those who are already struggling to make ends meet,” State Representative Cristin McCarthy Vahey, co-chair of the legislature’s Public Health Committee, said. “Erasing medical debt for an additional 100,000 residents will greatly ease the stress they are facing and will free them up to focus on their health and well-being. Thank you to Governor Lamont and Undue Medical Debt for their leadership on this innovative program.”

Because this debt erasure occurs through the purchase of large, qualifying bundled portfolios of debt from participating partners like hospitals and collection agencies, there is no application process for this relief and it cannot be requested.

Governor Lamont intends to continue partnering with Undue Medical Debt to enact further rounds of medical debt cancellation. The governor and the Connecticut General Assembly enacted legislation that makes $6.5 million in ARPA funding available for this initiative.