In 2021, Connecticut moved into the national spotlight with an ambitious new policy: giving babies on Medicaid $3,200 in a publicly funded tax-free account, with the state treasurer’s office holding the money in a trust until a child turns 18.
The money, state officials argued, could help children from low-income households gain an economic foothold as they come of age, giving them money that can help with a down payment on a home, fund a business or cover college expenses. And because of racial disparities in poverty in the state, the money could also help narrow Connecticut’s racial wealth gap.
After a political back and forth over funding that delayed its launch, the Connecticut program — the first state version of a longstanding economist-backed proposal known as “baby bonds” — fully came online in July 2023. The state estimates that roughly 16,000 eligible babies will be born each year.
Since then, baby bonds have gained increased attention across the country. Nearly a dozen pilots are active in a handful of states. And after years of failing to enact a federal baby bonds proposal long championed by U.S. Sen. Cory Booker and U.S. Rep. Ayanna Pressley, a conservative twist on the concept known as “Trump Accounts” was passed by Congress last month.
The shift has pushed Connecticut to the front of a growing movement, one that aims to address generational wealth, child poverty and racial inequality.
Here’s what to know about the history of Connecticut’s baby bonds program, who is eligible and how the program works.
Why did Connecticut start baby bonds?
Former Connecticut Treasurer Shawn Wooden has said that the goal behind Connecticut’s baby bonds program is to help close the state’s large racial wealth gap.
That focus, according to baby bonds proponents, ensures that the most disadvantaged children in the state are able to get a leg up. A 2024 report from the advocacy group Connecticut Voices for Children found that the state is dealing with persistent racial wealth and income gaps, with the median Black and Hispanic households earning $0.63 and $0.61 respectively for every dollar the median white household makes in the state.
The report adds that the gaps are likely contributing to recent increases in child poverty in Connecticut, which has returned to pre-pandemic levels by some estimates.
“If we do not address wealth inequality, we hurt our economy. It’s as simple as that,” Wooden said in 2021.
By investing in the state’s poorest children, baby bonds aim to help level the playing field by giving newborns with births covered by HUSKY, which is Connecticut’s Medicaid program, a cash investment that they can use once they turn 18. The state also hopes that the investment, which can only be accessed by Connecticut residents, will encourage families and young recipients to stay in the state.
Connecticut’s baby bonds program officially started in 2023 after the state created the Connecticut Baby Bonds Trust. The trust has been funded with roughly $400 million from a state reserve fund, allowing it to cover 12 years of investments.
Who is eligible for baby bonds?
In Connecticut, not every baby born in the state is eligible for baby bonds. Rather, the program focuses on children born into HUSKY-covered households, some of the lowest income households in the state. In 2025, children in a family of four making less than $64,622 are eligible for HUSKY. The eligibility limit increases to $84,555 for a family of four with a pregnant individual in the household.
Under Connecticut’s program, a family doesn’t need to apply for baby bonds. If a household is enrolled in HUSKY at the time of a child’s birth then the child is automatically enrolled in the state’s baby bonds program and receives the initial $3,200 deposit.
Eligible recipients must also be born on or after July 1, 2023 to receive any money. A child who only meets one of the above criteria would not be eligible for the state’s baby bonds program.
An eligible birth is all that is needed to receive an account. If a child leaves HUSKY as they grow older they would still receive a baby bonds account if they were eligible and enrolled when they were born.
Having a baby bonds account will not affect eligibility for other public benefits programs in the state.
How do baby bonds work?
The state treasurer’s office will manage the accounts until a recipient comes of age.
A baby bonds account cannot be touched by an eligible recipient until they are between the ages of 18 and 30. Before withdrawing money, a recipient must complete a state-approved financial literacy course and will need to prove Connecticut residency. Recipients are then able to spend money on a series of approved “asset-building” expenses, including a home down payment, starting a business or investing in education or retirement.
According to the state treasurer’s office, the money invested into a baby bonds account is expected to grow from the $3,200 deposit to somewhere between $10,000 and $24,000 by the time the account can be accessed. More information on how to file a baby bonds claim will be released in the future as the first eligible recipients get closer to adulthood.
My child qualifies for the baby bonds program. How do I get information?
According to the state treasurer’s website, families with a baby bonds eligible newborn will receive information about the state program in hospital birthing packets. State Treasurer Erick Russell explained that his office is also still building out numerous outreach programs, including its already-active CT Baby Bonds Ambassador initiative, to help communities learn about the baby bonds program.
Families who want to stay up to date on what is happening with baby bonds are encouraged to sign up for updates with the treasurer’s office. Families with a baby bonds-eligible child are also encouraged to keep their contact and address information current with the Connecticut Department of Social Services.
How are Trump Accounts different?
In July, President Donald Trump signed the One Big Beautiful Bill Act into law. The tax and spending law also includes a measure creating “Trump Accounts,” a $1,000 savings account created for every child with a social security number born between 2025 and 2028.
While the federal Trump Accounts seem similar to baby bonds, proponents of the latter argue that the new federal program, which does not account for wealth disparities or target lower income households in any way, will likely prove ineffective at addressing wealth gaps. In fact, because families will be allowed to contribute additional money to the accounts (something that the Connecticut program does not allow), it is possible that the accounts could actually widen wealth disparities.
“It’s important to note that baby bonds are really about addressing wealth inequality,” Russell said last month. “And that is not what the Trump accounts are designed to do.”
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
