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Connecticut Democratic Gov. Ned Lamont announced on Friday that the state will first cancel roughly $1 billion in medical bills by using $6.5 million in Covid-19 funds from the 2021 American Rescue Plan Act.
“It’s a debt that you had no control over,” Lamont told CNN. “It’s not like you overspent. You get hit by a health care calamity.”
Residents who are eligible are those with medical debt equaling 5 percent or more of their annual income or if their household income is up to 400 percent of the federal poverty line, or about $125,000 in 2024.
Additionally, eligible residents do not need to apply and they will be informed by mail announcement that their debt has been eliminated as soon as this summer. Over 1 in 10 Connecticut residents have medical debt in collections.
In addition to Connecticut, other states have unveiled plans to cancel medical debt. For instance, New Jersey included $10 million in its most recent budget to fund a pilot program to cancel residents’ medical debt. During his State of the State address last month, Gov. Phil Murphy shared that he has called on the state Legislature to expand the effort in the coming budget.
“For every dollar invested, we can retire up to $100 in debt – for tens of thousands of people,” Murphy said.
Meanwhile, New York City announced last month that it would eliminate over $2 million in medical debt for up to 500,000 residents throughout the next three years.
According to Allison Sesso, CEO of the RIP Medical Debt, shared that about 30 governments are working with the non-profit organization. She added that her charity purchases from hospital and other health care providers for a penny on the dollar, which copies deals that for-profit debt collectors are willing to land.
At the same time, however, Sesso noted that the initiatives do not guarantee a complete cancellation of a person’s medical debt.
A KFF analysis of 2020 Census Bureau data found that US adults have at least $195 billion in medical debt. The data also revealed that close to 1 in 10 Americans have medical debt of over $250, with Black Americans and middle-aged residents more greatly affected in the matter.
Meanwhile, an 2023 analysis by Third Way, a center-left think tank, revealed that the middle class are the most impacted by unpaid health care bills.
Image credit: ©Getty Images/Andrey Popov
Milton Quintanilla is a freelance writer and content creator. He is a contributing writer for Christian Headlines and the host of the For Your Soul Podcast, a podcast devoted to sound doctrine and biblical truth. He holds a Masters of Divinity from Alliance Theological Seminary.
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