North Carolina Hospitals Erase Medical Debt for 2.5 Million Residents

North Carolina has reached a statewide agreement under which all 99 hospitals have stopped collecting certain old medical debts and will automatically discount care for low- and moderate‑income patients going forward, a move officials say has already erased bills for about 2.5 million residents. Led by former health secretary Kody Kinsley and Gov. Josh Stein, the state tied extra Medicaid dollars to hospitals’ willingness to forgive qualifying debts dating back to 2014—the earliest year North Carolina could have expanded Medicaid—and to proactively screen patients for charity‑care eligibility instead of forcing them to apply. For a family of four, hospitals must now apply financial‑assistance discounts automatically for incomes under roughly $96,000, aiming to keep emergency visits from turning into long‑term collections. The nonprofit Undue Medical Debt helped hospitals identify eligible accounts, sending letters like the one a Gaston nurse received telling her a $459 ER bill from 2014 had been wiped away. Policy experts note that other states are experimenting with different tools to tackle an estimated $220 billion in U.S. medical debt, from banning medical debt on credit reports to buying and forgiving portfolios, but warn that the patchwork leaves residents’ protections uneven across state lines.