This week, many North Carolinians began receiving good news in the mail, accompanied by letters explaining that their medical debt has been forgiven. It’s all thanks to a first-of-its-kind state initiative started last year by former NC Governor Roy Cooper. Cooper and the former Health Secretary. Kody Kinsley used North Carolina’s Medicaid expansion, which Cooper championed for years, to incentivize all 99 acute care hospitals in the state to join the debt relief effort.
At the time, Cooper’s office estimated that over $4 billion dollars could be forgiven. In a welcome piece of good news, NC Governor Josh Stein announced last week that the program has far exceeded expectations. Over $6.5 billion dollars in medical debt has been forgiven so far, helping roughly 1-in-4 North Carolinians have the chance for a better future.
Hospitals were instructed to focus on debt belonging to low and middle income families that were unlikely to be able to pay it back. These were people who were hit by emergencies and unexpected illnesses, people who didn’t have a safety net and who were already struggling to make ends meet. As Gov. Stein said in his announcement, “Medical debt is not a choice. Nobody chooses to have a heart attack or get diagnosed with a chronic condition — you just have to deal with it.”
Many of these hospital bills were several years old and were only acting as weights around the necks of hardworking people without the means to repay them, hindering their financial security. By lifting this burden, Stein hopes to “help families regain financial stability, wipe negative marks off credit reports, and access essential health services without fear of long-term consequences.”
Beyond simple one-time debt forgiveness, this initiative creates a path to avoiding the problem from recurring in the future. By expanding the ways hospitals direct qualified patients in need to charity care and financial assistance, far fewer people will slip into unnecessary medical debt in the first place.
As part of the agreement, hospitals will also stop reporting medical debt to credit agencies so that people are no longer trapped in financial limbo. In return, hospitals are eligible for federal dollars secured through Medicaid expansion, giving them greater long-term financial stability. The program has received praise from non-profit organizations like Undue Medical Debt for creating a win-win solution that helps everyone involved.
Stein’s office expects the number of people helped and debt forgiven will continue to increase as hospitals look into more cases that may qualify. Letters explaining the good news are being mailed by Undue Medical Debt, with over 250,000 sent out last week and many more to come.
For more, see this NC Newsline story or the NCDHHS announcement.
