https://ncnewsline.com/2024/08/13/two-million-north-carolinians-could-benefit-as-hospitals-sign-on-to-medical-debt-forgiveness-program/?emci=a7877c54-1159-ef11-991a-6045bddbfc4b&emdi=5a929f92-6b59-ef11-991a-6045bddbfc4b&ceid=244814Two million North Carolinians could benefit as hospitals sign on to debt forgiveness program • NC Newsline
Two million North Carolinians could benefit as hospitals sign on to debt forgiveness program
By: Ahmed Jallow - August 13, 2024 5:30 am
News conference on reducing medical debt.
Dave Almeida of the Leukemia and Lymphoma Society, NC DHHS Secretary Kody Kinsley and Gov. Roy Cooper at a July 2024 press conference on medical debt forgiveness. (Photo: Lynn Bonner)
Gov. Roy Cooper announced Monday that 2 million North Carolinians will have their medical debt forgiven after all the state’s 99 acute hospitals signed up for a landmark program designed to wipe out debt for low- and middle-income patients.
The announcement comes after last month’s federal approval of the Cooper administration’s plan to forgive up to $4 billion in hospital debt for millions of people in the state. Under the plan, federal payments to hospitals from the Health Access and Stabilization Program (HASP) would increase in exchange for the hospitals eliminating old debt and helping patients avoid new ones.
“This is a win, win, win,” said Cooper. “It’ll help our hospitals, our people, and our economy thrive.”
The participating hospitals, including North Carolina’s largest hospital systems, account for most of the medical debts in the state.
By signing on to the plan, hospitals have committed to eliminating medical debt dating back to January 2014, for all Medicaid beneficiaries, as well as uncollectible medical debt for all patients with incomes at or below 350% of the federal poverty level. Past medical debt exceeding 5% of a person’s annual income will also be forgiven.
“Medical debt is a disease, plain and simple,” said state Department of Health and Human Services Secretary Kody Kinsley. “It’s a debt that no one wants, no one chooses to have cancer, to get in a car accident or have a heart attack. It’s debt that, even after hospitals spend millions of dollars and years trying to collect, is rarely collected.”
Kinsley also highlighted another policy change during his speech: shifting the responsibility of enrolling patients in charity care programs to hospitals. He said this change will make a huge difference by eliminating the need for patients to navigate complex paperwork.
“It is transformational,” he said.
“We know that so many more people are currently eligible for charity care programs today, but often struggle navigating paperwork or signing up, because often when you’re recovering from a heart attack or a stroke, that is not the best moment for you to figure out how to get into the charity care program.”
Patients enrolled in public benefit programs like WIC, SNAP, or Medicaid, and those experiencing homelessness, will automatically qualify for charity care by January 2025. By July 2025, participating hospitals must forgive past Medicaid debt, implement policies to protect credit ratings, and prevent aggressive debt collection as well as publicly post debt relief policies.
“This is an exciting step forward in alleviating the burden of medical debt for North Carolina families,” said Reggie Shuford, Executive Director of the anti-poverty advocacy organization, the NC Justice Center, in a statement. “Hospital support for medical debt protections is crucial to making health care more affordable in North Carolina, particularly for communities of color, who we know experience an inequitable share of medical debt and poor health outcomes.”
Officials are touting the program as a first-of-its-kind initiative in the country.
“This is, by and large, one of the largest medical debt forgiveness programs we have seen in the country, and also one of the most ambitious policies that we have seen to prevent medical debt from accruing in the first place,” said Kinsley.
Hospitals participating in the program will receive HASP payments that will bring an estimated $4 billion into the state this fiscal year and a projected $6.3 billion in the next year.
DHHS is collaborating with the nonprofit organization Undue Medical Debt and other nonprofits to work with hospitals over the next two years to implement the program. Patients do not need to take any action to benefit from the new initiative.
