RALEIGH, N.C. (WBTV) – North Carolina hospitals are taking part in an innovative and groundbreaking plan to relieve billions of dollars of medical debt for millions of people.
During a news conference Monday, North Carolina Governor Roy Cooper announced that every eligible hospital signed onto a plan that could wipe away $4 billion in debt in exchange for increased Medicaid payments.
“Hospitals can earn more by forgiving medical debt than trying to collect it. This is a win-win-win. It will help our hospitals, our people, and our economy thrive,” Cooper said Monday.
Cooper pointed to research showing hospitals only collect 5 percent of outstanding debt while the impact on the patients can be overwhelming.
“The mental toll of medical debt is significant,” Cooper said. “Most people want to pay their debts and it’s stressful when they can’t.”
The WBTV Investigates Team has reported extensively on the impact of medical debt on North Carolinians. Previous efforts from elected leaders to address hospitals collecting on medical debt have fallen short.
Undue Medical Debt CEO Allison Sesso said the hospitals deserve praise for being willing to participate in the program. Hospitals stand to receive an additional $4 billion in Healthcare Access and Stabilization Program payments this year and an additional $6.3 billion next year.
“Today’s effort and their works shows that commitment to building healthier communities going forward,” Sesso said.
NCDHHS Secretary Kody Kinsley said that hospitals have until July 2025 to begin the debt relief promises for Medicaid patients and will work over the next two years to comply with the relief for other eligible patients.
By signing on to the plan, hospitals have committed to relieve medical debt dating back to Jan. 1, 2014, for all Medicaid beneficiaries, as well as medical debt deemed uncollectible for all patients whose income is at or below at least 350% of the federal poverty level. Past medical debt that exceeds 5% of a person’s annual income will also be relieved.
Participating hospitals will work with NCDHHS and Undue Medical Debt or other non-profit partners over the next two years to fully implement medical debt relief and debt mitigation policies. Patients do not need to take any action to benefit from the program.