New Partnership Erases Medical Debt for Thousands of Connecticut Residents

By Hugh McQuaid

December 17 @ 5:00 am

A new partnership between a national nonprofit organization and the state of Connecticut will reduce or eliminate medical debts owed by roughly 23,000 residents in the coming days, state officials announced Monday.

The group, Undue Medical Debt, has used public investments to negotiate with health care providers to eliminate bundles of medical debt owed by residents who fall under the income threshold of less than four times the federal poverty level or residents whose medical debt meets or exceeds 5% of their overall income, according to Gov. Ned Lamont’s office.

Allison Sesso, president and CEO of Undue Medical Debt, explained the process during a late morning press conference in the state Capitol’s Old Appropriations Room.

“It is not magic, it is the market,” Sesso said. “Basically there is a for-profit debt market in which you can buy medical debt for pennies on the dollar and the reason why you can buy it for pennies on the dollar is, unfortunately, the people who owe it really don’t have the money to pay it. Our health care system has unreasonable expectations about what people pay out of pocket based on their income ”

The first round of the initiative involved a state investment of around $100,000 in federal American Rescue Plan Act funds, which Undue Medical Debt has been able to use to negotiate and acquire roughly $30 million in medical debt owed by Connecticut residents.

“This is all about making sure that health care is more broadly available, accessible and affordable,” Lamont said. “We want to make sure that nobody — nobody is discouraged from getting the check up they need, the preventative care they need, and making sure that our amazing hospitals here in our state can take care of you.”

Sen. Saud Anwar, a South Windsor Democrat who serves as Senate chair of the legislature’s Public Health Committee, said his panel would seek to address the affordability of health care more broadly during the legislative session that begins next month.

“This is probably a trillion dollar question at the national level, if not more. The reality is in our legislative session this year, we started to look at what are the various things we can do. In this upcoming session we will be discussing some of these aspects,” Anwar said, including looking at insurance companies. “What are they doing that is increasing costs to consumers? Another component is ‘how can we prevent this?’”

Residents who will be benefiting from relief under the first round of the program will receive a letter from Undue Medical Debt, which will outline the debts that have been eliminated. These letters will be delivered through the U.S. mail beginning on Dec. 23, the governor’s office said.