Connecticut is set to become the first state to eliminate medical debt for all eligible residents.

The program, expected to commence in June, will be carried out in partnership with a nonprofit organization specializing in acquiring and canceling medical debt. Eligible residents include families whose medical debt represents five percent or more of their annual income.

According to a recent Consumer Financial Protection Bureau report, medical debt in Connecticut surpasses credit cards, personal loans, utilities and phone bills combined. Currently, the state faces a considerable medical debt crisis, with more than one in 10 residents having medical debt in collections.

In a recent appearance on ABC's "Good Morning America," Connecticut Gov. Ned Lamont unveiled a plan that utilizes $6.5 million from the American Rescue Plan Act funds to erase a staggering $1 billion in medical debt. The relief initiative is anticipated to benefit approximately 250,000 residents in Connecticut, with no formal application process required.

"This is not something they did because they were spending too much money; this is something because they got hit with a medical emergency. They should not have to suffer twice – first with the illness, then with the debt. I think it’s really important that people have a sense that they can start building wealth of their own. We're making that easier for people to do – and the best way to start is [to] eliminate the debt you’ve got," the governor said.