Some low-income families with medical debt are about to get a great Christmas present.
A partnership with a national nonprofit organization has enabled the state to cancel approximately $30 million in medical debt for nearly 23,000 state residents, Gov. Ned Lamont announced Monday.
Lamont said that nearly 23,000 Connecticut residents who have medical debt will be notified in the coming days that some or all of that debt has been eliminated under the first round of an initiative launched through a partnership with Undue Medical Debt, a national nonprofit.
The organization contracts with state and local governments and leverages public investments to negotiate with hospitals and other providers on eliminating large, bundled portfolios of qualifying medical debt owed by patients whose income is at or below four times (400%) the federal poverty level or who have medical debt that is 5% or more of their income.
The current federal poverty level is an annual income at or below $31,200 for a family of four.
Because these medical debts are acquired in bulk and belong to those least able to pay, they cost a fraction of their face value, the state said.
In the first round, Lamont said his administration invested approximately $100,000 from the state’s American Rescue Plan Act (ARPA) funding, and Undue Medical Debt was able to negotiate with a secondary market partner (a collections agency) and a national provider to acquire approximately $30 million in qualifying medical debt for Connecticut residents.
There is no application process for the medical debt relief and it can’t be requested, Lamont said. Instead, residents whose debt has been identified for relief will receive a branded letter from Undue Medical Debt indicating which debt or debts have been eliminated.
The letters, which are from Undue Medical Debt and the governor’s office, will be delivered to state residents via the U.S. mail beginning Dec. 23.
Lamont said his administration intends to continue partnering with Undue Medical Debt to enable additional rounds of eliminating medical debt for state residents. The state has authorized $6.5 million in ARPA funding for the initiative.
