Connecticut Gov. Ned Lamont (D) announced Friday a plan to cancel medical debt for residents of the constitutional state, a first-of-its-kind initiative.
The plan was there first announced on ABC’s “Good Morning America.” According to ABC, the plan includes using $6.5 million in funding from the American Rescue Plan Act to cancel $1 billion in medical debt by working with debt-buying and canceling nonprofits. It is said to be included.
Eligible households include those with debts of 5% or more of their annual income.
“This isn’t something they did because they spent too much money. They did it because they had a medical emergency,” Lamont said of people struggling with medical debt. “They don’t have to suffer twice, first through illness and then into debt.”
About 250,000 Connecticut residents are expected to have their medical debt canceled, state officials said.
“I think it’s really important for people to have a sense that they can start building their own wealth,” Lamont said. “We’re making it easier for people to do that, and the best way to start is to get rid of the debt you have.”
Last September, the Biden-Harris administration announced that it had begun considering removing medical debt from consumer credit reports in an effort to lessen the impact of unexpected medical bills on people.
The Consumer Financial Protection Bureau (CFPB) said in a press release at the time that the proposal would “prevent debt collectors from coercing people into paying bills they don’t owe, and reduce creditors’ reliance on data.” This will help prevent this from happening.” They are often plagued by inaccuracies and mistakes. ”
The CFPB revealed in its 2022 report that medical debt is the most common collection type.
CFPB Director Rohit Chopra said, “Research shows that medical bills have little predictive value in credit decisions, yet tens of millions of American households struggle to cope with medical debt listed on their credit reports.” “There is,” he said.
Copyright 2024 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
