(HARTFORD, CT) – Governor Ned Lamont announced today that nearly 23,000 Connecticut residents who have medical debt will be notified in the coming days that this debt will be partially or fully discharged as part of the first round of a major initiative by his Government has launched through partnership with the national non-profit organization Inappropriate medical debt.

The nonprofit organization contracts with state and local governments and leverages public investments to negotiate with hospitals and other providers to eliminate large, pooled portfolios of qualified medical debt owed by patients whose incomes are four times (400%) federal poverty level or less or who have medical debt that represents 5% or more of their income. (The current federal poverty level is an annual income of $31,200 or less for a family of four.) Because this medical debt is purchased in bulk and belongs to those least able to pay, it costs only a fraction of its face value.

As part of this first round, the Lamont Administration invested approximately $100,000 from the federal allocation of American Rescue Plan Act (ARPA) funds, and Undue Medical Debt was able to negotiate with a secondary market partner (e.g., debt collection agency) and a national provider , to acquire about $100,000 and $30 million in qualified medical debt for Connecticut residents.

There is no application process for this medical debt relief and it cannot be applied for. Instead, residents whose debts are being eliminated will receive a letter from Undue Medical Debt with a logo indicating which debts have been eliminated. Letters under this first round will be delivered via U.S. Mail to Connecticut residents beginning December 23, 2024.

Governor Lamont said his administration intends to continue working with Undue Medical Debt to implement additional rounds of medical debt elimination. The Governor and Connecticut General Assembly worked together to provide $6.5 million in ARPA funding for this initiative.

“Medical debt hits patients at an extraordinarily difficult time when they are struggling with serious health conditions, and it can often stay with them for decades and impact almost every aspect of their lives.” said Governor Lamont. “This cancellation will reduce the significant emotional burden that this type of debt places on individuals who do not have the means to get out of their debt, particularly those who also suffer from significant medical problems.” This first round will Relief for thousands of Connecticut residents, and I hope that by continuing this partnership with Undue Medical Debt, we can help thousands more Connecticut residents relieve their debt.”

“We are very grateful to the State of Connecticut for this significant investment in medical debt relief and I am pleased that this first round of letters is arriving in time for the holiday season.” said Allison Sesso, CEO and President of Undue Medical Debt. “Debt relief is just one, albeit important, piece of the puzzle to provide emotional and financial relief to families. I am pleased that Governor Lamont has also committed to finding upstream solutions through legislation to ensure that medical debt does not negatively impact an individual’s credit score.”

In addition to this initiative, Governor Lamont recently signed law Enact a law prohibiting health care providers and hospitals in Connecticut from reporting an individual’s medical debt to credit rating agencies for use in credit reports. This new law, which went into effect on July 1, 2024, was enacted to protect patients who might otherwise have been afraid to seek vital medical care because they feared that failure to pay would have a negative impact on their credit rating could impact.