Governor Cooper & NCDHHS Highlight Importance of Medical Debt Relief for NC

Raleigh -- August 7, 2024: Press Release North Carolina Governor Roy Cooper's Office: North Carolina Governor Roy Cooper

and NC Health and Human Services Secretary Kody Kinsley today gave an update at Care Ring in Charlotte on their plan to incentivize hospitals to relieve medical debt for millions of low- and middle-income North Carolinians. Participants spoke about the impact of relieving up to $4 billion in medical debt for people in the state, as well as the program’s potential reach in the Mecklenburg County area.

“Unlike most other debts, medical debt is not a choice. It is often a constant weight on many low to middle income people that ruins their credit, keeps them from getting jobs, loans and credit cards, drives them into bankruptcy and discourages them from getting preventive health care they need,” said Governor Cooper. “This first in the nation plan incentivizes hospitals to forgive medical debt, making our families and communities healthier and stronger.”

More than 137,000 people in Mecklenburg County are eligible for medical debt relief under North Carolina’s newly approved relief incentive program. If every hospital in the state opts in to participate, the relief program will address nearly $3.4 million in existing medical debt in Mecklenburg County alone.

“Medical debt is a disease in our health system. Relieving this debt can lead to healthier individuals and a stronger health system overall,” said Secretary Kinsley. “The financial burden and fear of medical debt – a debt no one ever chooses to have – makes people avoid getting the essential and preventive care they need. Meanwhile, hospitals spend too much chasing pennies on the dollars they’ll likely never collect.”

The burden of medical debt impacts not only North Carolinians and their families, but also the financial sustainability of the state’s health care system. While hospitals are not the only form of medical debt, they are the largest. North Carolina hospitals hold more than $4 billion of debt according to estimates and often expect to receive only a small fraction, if any, of the original amount billed by using debt collections practices.

Governor Cooper and NCDHHS last week announced approval by the U.S. Centers for Medicare and Medicaid Services (CMS) to leverage the state’s Medicaid program to incentivize hospitals to relieve medical debt and to implement policies to prevent debt from building in the future. Hospitals that choose to participate will receive their share of a higher level of Medicaid reimbursement under the Healthcare Access and Stabilization Program (HASP), bringing billions of additional federal dollars into the state to mitigate the impact of medical debt.

North Carolina hospitals that choose not to participate in the medical debt relief incentive program remain eligible for base HASP payments.

“As an organization dedicated to ending the undue burden of medical debt, we're thrilled to see North Carolina leadership addressing medical debt through an approach that both relieves past debts and prevents future ones," said Allison Sesso, CEO and president of Undue Medical Debt. "Hospitals want their communities to thrive and I'm heartened by those providers who have expressed their support for this initiative, which protects patients facing financial hardship from unaffordable costs that too often accompany care."

NCDHHS is partnering with Undue Medical Debt as the preferred facilitator of medical debt relief to support and encourage hospitals across the state to participate in the relief incentive program. Hospitals have until Friday, Aug. 9, 2024, to opt in to the debt relief program.

Care Ring is a nonprofit organization dedicated to providing health services for the uninsured, underinsured or those lacking access to affordable, high-quality health care. The organization annually serves more than 7,600 people in Mecklenburg County and is a leader in collaborative efforts to improve community health. Care Ring has been enabling this care to the community since 1955, with a track record of providing access to preventive health care and improving maternal and children’s health.

Additional information is available in the   frequently asked questions on the effort to relieve medical debt in North Carolina.