A state government program has canceled more than half a billion dollars in medical debt — without requiring a single resident to fill out an application. Connecticut’s initiative has wiped out $513 million in medical debt for more than 250,000 residents since its launch in 2024 C.E., and a fourth round is now delivering relief letters to roughly 97,000 more people.
At a glance
- Medical debt cancellation: Connecticut has erased $513 million in debt for more than 250,000 residents since 2024 C.E., funded by $6.5 million in federal American Rescue Plan Act dollars.
- Income eligibility: Residents qualify if they earn 400% or less of the federal poverty level — roughly $132,000 or less for a family of four — or if their medical debt equals 5% or more of their annual income.
- Automatic relief: Qualifying residents don’t have to apply. If their provider participates and they meet the thresholds, cancellation happens automatically and a letter arrives in the mail.
How the program works
Connecticut partnered with Undue Medical Debt, a nonprofit that buys medical debt portfolios from hospitals and collection agencies at a fraction of their face value, then cancels what patients owe. The nonprofit’s model is built on a simple financial reality: medical debt trades at steep discounts in secondary markets, so a modest public investment can erase an outsized amount of patient debt.
The state allocated $6.5 million from federal COVID-era American Rescue Plan Act funding. Undue Medical Debt says that every $1 spent cancels roughly $100 in debt — a ratio that helps explain how $6.5 million in public money has so far produced $513 million in relief.
Gov. Ned Lamont first proposed the program in 2023 C.E. and signed a contract with Undue Medical Debt in May 2024 C.E. after negotiating funding with the state legislature. The nonprofit has run similar partnerships with New Jersey, Arizona, Rhode Island, and New York City. Residents don’t need to seek out the program. If their hospital or provider participates and they fall within the income or debt-burden thresholds, the debt simply disappears — and a letter confirms it.
Why medical debt relief matters
Medical debt doesn’t fall evenly. Research from KFF Health has found that people in worse health, those living with a disability, and Black Americans are all more likely to carry it — meaning the burden concentrates in communities already facing the steepest barriers to care.
“Medical debt is a burden carried by families in every Connecticut community, but it disproportionately affects working-class families,” Lamont said in the press release announcing the fourth round.
A joint investigation by the Connecticut Mirror and KFF Health News also found that while many hospital systems have stopped suing patients over unpaid bills, doctors’ practices and other non-hospital providers now dominate healthcare collections in the state. Patients described confusion about how large bills accumulated despite having insurance — and why they didn’t qualify for financial assistance on modest incomes.
The real limits of the program
The program’s reach depends entirely on which providers choose to join — and that gap is significant. Hartford HealthCare, the largest hospital system in Connecticut, has not participated in any of the four rounds of debt cancellation. Yale New Haven Health also did not respond to questions before the source reporting was published.
Residents whose debt is held by non-participating systems may receive no relief regardless of their income or circumstances. The state’s goal is to cancel roughly $650 million in total debt by the end of 2026 C.E. Even if that target is met, a meaningful share of Connecticut’s total medical debt will remain untouched — and the underlying billing system that generates new debt continues unchanged. Cancellation addresses what already exists; it doesn’t prevent what comes next.
A model other states are watching
Connecticut’s combination of scale, funding mechanism, and income thresholds offers a framework other states can replicate without waiting for national reform. The core logic is straightforward: leverage bulk debt purchases through a nonprofit intermediary, set clear income thresholds, and deliver relief automatically so the people who need it most don’t have to navigate a new bureaucracy to claim it.
Undue Medical Debt’s growing list of state and city partnerships has now collectively erased billions of dollars in debt across the country. For the 97,000 Connecticut residents receiving letters this week, the impact is immediate: a debt that may have shadowed their credit reports, limited their options, or simply weighed on them month after month will simply be gone.
That outcome — multiplied across 250,000 people in just over a year — represents one of the more tangible public health interventions a state government has managed to execute in recent years, even as the broader system that produced those debts remains in place.
Read more
For more on this story, see: CT Mirror
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