Connecticut Plans to Cancel Medical Debt for Many Residents

Imagine opening an envelope in your daily mail and finding out that your medical debt has been completely wiped out. That's the reality for around 250,000 residents of Connecticut, as the state announces it will become the first to cancel $650 million in medical debt. In the U.S., medical debt is now the largest source of debt in collections; nearly 1 in 10 American adults have more than $250 in medical debt, a phenomenon that adds up to more than credit cards, utilities and auto loans combined in the nation. "It's a debt that you had no control over," Connecticut Gov. Ned Lamont told CNN. "It's not like you overspent. You get hit by a healthcare calamity." Connecticut residents whose medical debt is 5 percent or more of their annual income, or whose household income is four times the federal poverty line (or about $125,000 in 2024) are eligible. This bold move not only gives residents economic breathing room, but also serves as a trailblazing case study for other states.

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