Connecticut erases $63M medical debt for 40,000 residents

Connecticut is wiping out another wave of medical debt, offering relief to tens of thousands of residents from Hartford to New Haven, Bridgeport, and beyond.

In the latest phase of the state’s Medical Debt Erasure Initiative, nearly 40,000 people will see some or all of their medical bills erased. That’s a major financial burden lifted—giving families a shot at recovering, both financially and physically, without the constant stress of crushing healthcare costs.

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Connecticut’s Latest Round of Medical Debt Relief

Governor Ned Lamont just announced that more than $63 million in medical debt is being eliminated in the third phase of the Medical Debt Erasure Initiative.

This program quietly but powerfully targets residents across the state, from Waterbury and Stamford to Norwalk, New Britain, and smaller communities that feel the sting of medical bills just as sharply.

Since the initiative began in December 2024, the state has moved aggressively to reduce the impact of unpaid medical bills. These debts can haunt families for years, hurt credit scores, and delay necessary follow-up care.

How Much Medical Debt Has Been Erased So Far?

The numbers behind the initiative really show how sweeping this effort is:

Third round: Over $63 million erased for nearly 40,000 residents

Second round: More than $100 million erased for about 100,000 residents

First round: About $30 million erased for roughly 23,000 residents

All told, nearly 160,000 Connecticut residents have seen their debt wiped out. That’s a total of $198 million in medical bills eliminated statewide.

From Danbury to New London, this is relief on a scale the state’s never seen before.

How the Medical Debt Erasure Initiative Works

The state isn’t paying every bill in full at face value. Instead, Connecticut uses an innovative model that leverages the way medical debt is bought and sold on the secondary market.

This lets a relatively modest public investment erase massive amounts of debt. For residents in cities like Meriden, Middletown, or Bristol, relief can arrive without them lifting a finger.

Partnership with Undue Medical Debt

Connecticut teamed up with Undue Medical Debt, a national nonprofit that specializes in purchasing medical debt at a fraction of its original value.

Hospitals and collection agencies often sell large portfolios of unpaid bills for pennies on the dollar. Undue Medical Debt uses donations—in this case, state-directed funds—to buy those portfolios and cancel the debt.

This approach stretches every public dollar much further than direct bill payments ever could. It multiplies the impact of the state’s investment in a way that’s honestly kind of impressive.

Who Qualifies for Medical Debt Erasure?

Residents don’t need to apply for this relief. Eligibility is determined behind the scenes using income and debt data.

Generally, qualifying residents meet one of these benchmarks:

Income at or below 400% of the federal poverty level

Medical debt totaling at least 5% of their annual income

If a person meets those standards and their debt is included in a purchased portfolio, it’s automatically forgiven. Families in places like Groton, Enfield, and Manchester could be included without ever filling out a form.

No Applications, Just a Letter of Relief

The process is intentionally simple. Residents don’t have to navigate complicated paperwork or prove hardship.

Once debt is erased, Undue Medical Debt sends a notification letter directly to the affected individual. For people dodging collection calls or worrying about ruined credit, opening that letter can be an immediate turning point.

Funding, Future Rounds, and Impact on Families

The Medical Debt Erasure Initiative is backed by $6.5 million in federal American Rescue Plan Act (ARPA) funding.

Governor Lamont says he intends to continue the program, using these federal dollars to buy and cancel as much qualifying debt as possible. From big cities like Hartford and Bridgeport to smaller towns across Litchfield and Windham counties, the impact is the same—fewer families forced to choose between paying a medical bill and paying the rent.

Reducing Stress, Improving Health Outcomes

Lamont points out that medical debt is more than just a financial line item. It creates chronic stress and anxiety, delays recovery, and can even keep people from getting the follow-up care they need.

This kind of debt doesn’t just affect individuals—it can throw entire households off balance. Connecticut’s move to cut nearly $200 million in debt in less than a year is a big deal for both financial stability and health.

For a lot of families, this isn’t just about numbers. It’s a genuine chance to start fresh, finally free from those old hospital bills that always seem to lurk in the background.

Here is the source article for this story: Connecticut to erase $63 million in medical debt for 40,000 residents

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