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May 15, 2024

CT gets 18-year head start promoting ‘baby bonds’

MARK PAZNIOKAS / CTMIRROR.ORG Sydone Hall-Campbell and her 2-month-old son, who can expect the proceeds of a baby bond in 18 years.
By Mark Pazniokas, CT Mirror

Connecticut’s first “baby bond,” an innovative benefit promised to every baby born on Medicaid since July 1, 2023, won’t be payable until the summer of 2041. But Treasurer Erick Russell already is doing outreach.

In effect, Russell is leaning into an aspect of the program that makes it a long-term experiment: Will the promise of proceeds from a baby bond when the child reaches 18 make a difference in how the child is raised and sees the future?

“It’s really providing hope to families, being able to see a future that’s different than the one that they may have seen for generations in their families,” Russell said at Wheeler Health, a community clinic on Asylum Hill in Hartford.

With Gov. Ned Lamont and Hartford Mayor Arunan Arulampalam, Russell announced a partnership with the Community Health Center Association to promote the existence of the baby bonds.

The state, of course, knows the names of the babies born eligible for a bond as a recipient of HUSKY, as Medicaid is branded in Connecticut. The goal of the partnership is to keep the benefit top-of-mind.

Pediatricians and others at the community health centers that provide health care to 420,000 will discuss the possibilities offered by the baby bonds.

“When you think about many people who’ve had interactions with government, who are most in need, that interaction is not always positive,” Russell said.

For each eligible baby, $3,200 is invested on their behalf through a trust fund administered by the office of the treasurer. To cash in, a recipient must be between the ages of 18 and 30, pass a financial literacy test and be a Connecticut resident.

Depending on the age at which a recipient accesses the money, the bond is expected to be worth at least $11,000 and as much $24,000. Intended to combat generational poverty, the money can be used for education, buying a home, investing in a business or saving for retirement.

“These are all the different ways that baby bonds are part of what we want to do to make sure Connecticut is the most family-friendly state,” Lamont said.

More than half the babies born in Connecticut are to mothers on Medicaid, and those eligible live in all but three of the state’s 169 cities and towns.

“But what we know in the city of Hartford is that the racial wealth gap is large and growing, that Latino families on average have household wealth of about a quarter of white households, that black households have a wealth of about a tenth of white households,” Arulampalam said.

About 15,600 babies are expected to be automatically enrolled in the program every year.

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