Connecticut is looking to forgive medical debt for residents in the first half of the year, with many details yet to be finalized.
Connecticut Gov. Ned Lamont announced the debt-clearing initiative Feb. 2 on ABC’s "Good Morning America." The state plans to invest $6.5 million in funds from the 2021 American Rescue Plan Act toward a partnership with RIP Medical Debt to abolish approximately $650 million in medical debt for eligible state residents.
For every $100, RIP Medical Debt abolishes $10,000 of medical debt. The nonprofit noted to Becker's that it has "not yet begun the process of negotiating contract terms, nor signed a formal agreement" with the state.
Connecticut residents would be eligible if their medical debt equals 5% or more of their annual income or if their household income is up to 400% of the federal poverty line. Connecticut residents affected by the initiative will simply be notified that their medical debt is eliminated. The timeline for completion is unclear since a contract has not been finalized.
RIP Medical Debt clarified reported claims that the state was looking to prioritize single parents in the initiative: "The program will prioritize low-income patients, per RIP's income criteria above, but will not and cannot explicitly target or prioritize single parents," according to a statement shared with Becker's.
"RIP hopes to work closely with Governor Lamont and his team as the contract is finalized and will provide further updates to the public as details become available," the debt clearing group said in its Feb. 5 statement.
New Jersey is also engaged with RIP Medical Debt on a statewide relief initiative, the nonprofit told Becker's. U.S. cities and counties have pursued similar initiatives. Last month, New York City rolled out a program with RIP Medical Debt to clear more than $2 billion in healthcare debt for up to 500,000 New Yorkers. In a similar but smaller effort, Cook County in Illinois — which encompasses Chicago — partnered with RIP Medical Debt to acquire and erase $79.2 million in medical debt, benefitting 72,989 county residents.
Medical debt is a widespread challenge for both uninsured and insured adults in the United States, with about 41% holding debt caused by their medical or dental bills, according to 2022 data from KFF.