HARTFORD, Conn. -- Connecticut could soon become the first state to cancel medical debt for thousands of residents.

Gov. Ned Lamont says the legislative proposal would eliminate around $650 million in medical debt for about 250,000 residents.

The governor says the state would contract a nonprofit that buys medical debt and eliminates it at a reduced cost. He talked about who qualifies on CNN.

"Mainly, it's working families, folks earning up to about $125,000 a year who are paying 5% of their income in bad debt or medical debt expenses. Trying to liberate them a little bit. We're now contracting with the not-for-profit. They'll be going to the hospitals, seeing how much of this debt we're able to write down. We're doing this in association with the hospitals," Lamont said.

Lamont says $6.5 million in unused COVID funds would help pay off the debt.

The governor plans to include his proposal in a budget announcement next week.