Communications Director, Connecticut Hospital Association
110 Barnes Road, Wallingford, CT
rall@chime.org, 203-265-7611
CT Insider – Thursday, May 22, 2025
By Cris Villalonga-Vivoni
If you receive notice in the coming days that some or all of your medical debt has been canceled, your first reaction may be that it’s a joke or a scam.
But that’s unlikely to be the case in Connecticut.
More than 100,000 people across the state are expected to receive notice in the coming days that their medical debts are, at least in part, being wiped away. It’s part of the state’s effort to cancel hundreds of millions of dollars in medical debts. This will mark round two in recent months of erasing debt for residents.
“Medical debt causes additional anxiety and stress when individuals and families are coping with potentially life-threatening health situations,” Gov. Ned Lamont said in a statement. “I am hopeful that additional medical partners will soon sign onto this program to help more Connecticut families through further rounds of this initiative.”
Lamont’s office said the state invested $575,000 in American Rescue Plan Act funding to negotiate, acquire and eliminate more than $100 million in qualifying medical debt, while working with the nonprofit organization Undue Medical Debt.
As of 2017, about 19% of households nationwide had medical debt, according to the U.S. Census Bureau, including 27.9% of Black households and 21.7% of Hispanic households.
The idea of erasing medical debt is not unique to Connecticut. Still, Lamont’s statewide approach was one of the first in the nation, announcing his plans in 2023 and gaining national attention. The program has been built out slowly, with around $6.5 million in federal money from the American Rescue Plan Act allocated to the state’s budget to cancel about $650 million in medical debt.
The nonprofit leverages private donations and state funds to acquire and erase debts owed by eligible residents from hospitals, medical providers and debt collectors. CT Insider previously reported that each dollar of funding typically amounts to about $100 in cancellation, allowing hospitals to turn a profit from debt they might not have been able to collect.
The first round of debt cancellation in December 2024 reached 23,000 residents and eliminated approximately $30 million in debt after the state invested around $100,000 in ARPA funds.
“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,” according to the press release.
There is no application process for the relief. Instead, residents may automatically qualify if their household is up to four times the federal poverty level or their medical debt amounts to at least 5 percent of their annual income.
Residents whose debt was canceled receive a branded envelope and letter from Undue Medical Debt in the mail over the next week, showing the total debt abolished, the creditors, account numbers and dates of service. Residents will not have to pay taxes on the cancellation.
“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,” said Allison Sesso, CEO and president of Undue Medical Debt, in a press release. “We look forward to continuing our work in the state so families can seek healthcare with dignity.”