Gov. Ned Lamont announced the erasure of $30 million in medical debt for 23,000 Connecticut residents during this holiday season through a partnership with the nonprofit organization Undue Medical Debt, which purchases medical debt for pennies on the dollar to eliminate it.
This first round of Connecticut’s medical debt forgiveness cost less than pennies on the dollar: Connecticut spent $100,000 in federal taxpayer funds to pay off that $30 million in debt, a small fraction of the $6.5 million in federal American Rescue Plan (ARPA) dollars the state has stashed away for eliminating medical debt.
Lt. Gov. Susan Bysiewicz said residents who had some or all of their medical debt forgiven will simply receive a letter in the mail from Undue Medical Debt, which will be sent out on December 23, informing them of the payoff and do not have to do anything – nor does anyone have to apply to have their medical debt forgiven.
“If you are one of the 23,000 people receiving this, it’s not a scam, it’s really good news, and it’s an early Christmas or holiday gift to you,” Bysiewicz said. “We believe in Connecticut that if you get an illness, you are involved in an accident, you should get the healthcare you need and you should not be burdened with debt as a result.”
President and CEO of Undue Medical Debt Allison Sesso says there is a for-profit market for purchasing and selling medical debt for fractions of the actual debt because the people who owe the debt cannot afford to pay it. Her organization purchases the debt either from debt buyers or directly from the providers, analyzes the accounts, identifies people who qualify based on income data, and then leverages government to pay off the debt.
Sesso said they anticipate “getting rid of at least $650 million at least in debt” over the next few years with the $6.5 million in available funds.
“It is not magic, it is the market,” Sesso said. “It’s really a failure of the systems, not of people. People want to pay their debts. They just don’t have the means to do so.”
Jennifer Jackson, CEO of the Connecticut Hospital Association, was also on hand to support the debt payoff, saying their organization also supported legislation enacted last year that removes medical debt from credit ratings, saying Connecticut’s hospitals have always discouraged the reporting of medical debt to credit agencies.
“No one should avoid or delay seeking medical care because of a concern about ability to pay. That’s a core value of Connecticut hospitals,” Jackson said, adding that Connecticut’s hospitals have generous repayment policies. “We also believe very strongly that medical debt should never limit an individual’s economic opportunity. We are opposed to aggressive collection practices and do not engage in them, and … we have long refused to report medical debt to credit agencies.”
The rising cost of health care and health insurance is a national issue, that was dramatically brought to the forefront of news media this past month with the assassination of UnitedHealth CEO Brian Thompson, which sparked rationalizations for the alleged shooter’s actions by politicians and national commentators.
Sesso said that much of the debt is the result of people being underinsured, rather than not insured, and having deductibles that are too high for their income. Medical and health insurance costs have often been at the forefront of the Connecticut politics, however, answers big and small, have been few and far between, often cut down by political in-fighting.
The State of Connecticut itself is not immune from the escalating cost of health care and taxpayers in the coming years will be footing the bill for increased Medicaid costs, which are already over budget by $225 million, and rapidly rising Medicare Advantage costs for retired state employee, which is projected to rise from $693 million this year to over $1 billion in 2027 due to federal changes.
The rising costs, shrinking surpluses, and state agencies clamoring for funds now that ARPA dollars have run dry have led to increasing pressure on Lamont and lawmakers to alter Connecticut’s fiscal guardrails to enable more government spending, rather than paying down the state’s pension debt.
Lamont stopped short of addressing questions about the fiscal guardrails, saying only that he would be presenting his budget in February.
“This is all about making sure healthcare is more broadly available, affordable and accessible,” Lamont said during the press conference. “Medical debt is something you don’t necessarily have control over.”
“We’re doing everything we can to make sure this is an emergency you can live through,” Lamont continued. “From this meeting, we’re going to be sitting down, a few of us, and see how else we can tackle the high cost of health care in this state. But this is a very good start and its helping thousands of people.”
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I believe that the Governor and State representatives should review the policies of State Income Taxes paid by retired seniors making less than 100k per year.
I’m a single retired disabled senior with an income of less than 60k, living on monthly payments to pay for high costs groceries, Car insurance, and high cost co-pays. Always worked my entire life never depended on State, Federal or local programs.