Connecticut will be 1st state to cancel medical debt for eligible residents | ABC News exclusive [Video]

CONNECTICUT — Connecticut will become the first state to cancel medical debt for eligible residents, Gov. Ned Lamont announced exclusively Friday on “Good Morning America.”

The state plans to erase approximately $1 billion in medical debt this year by leveraging $6.5 million in American Rescue Plan Act funds, it said.

The state said it is contracting with a nonprofit organization that buys medical debt and eliminates it at a reduced cost.

Residents whose household income is up to 400% of the federal poverty line (for a family of four, that’s $156,000 annually) or whose medical debt equates to 5% or more of their annual income will be eligible under the program, the state said.

Some 250,000 residents are anticipated to see their medical debt erased with this initial $6.5 million investment, the state said.

Eligible households won’t have to apply because the contracted agency will work with state agencies to automatically wipe …