Biden Administration Approves North Carolina Plan to Eliminate Medical Debt 

By Consumers for Quality Care, on August 21, 2024

Two million North Carolinians will have their medical debt forgiven under a plan recently approved by the Centers for Medicare and Medicaid Services (CMS), according to Axios. 

The plan is just one part of the Biden administration’s broader effort to address the harms of medical debt for consumers nationwide. Earlier this summer, the Biden administration proposed a plan to bar medical debt from appearing on credit reports, a problem that currently affects 15 million Americans.  

Under the North Carolina plan, the state has agreed to give hospitals more Medicaid funds if they agree to forgive medical debt owed by consumers. This plan has the potential to eliminate as much as $4 billion in medical debt for two million North Carolina residents. This relief will help vulnerable consumers, including those on Medicaid, as well as other low-income families or families whose debt exceeds five percent of their annual income. 

In exchange for these additional Medicaid funds, hospitals must agree to offer discounts to consumers that fall below a certain income, as well as provide financial assistance in the form of charity care. Under the plan, hospitals are also forbidden to sell the information of consumers eligible for this debt relief to debt-collection agencies.  

The Tar Heel State has the third-highest rate of medical debt among adults, totaling just over 13 percent from 2019 to 2021. Recently, however, the state has gone to great lengths to address this issue. Just last year, North Carolina expanded Medicaid, giving 600,000 residents eligibility for health care coverage.  

CQC applauds these efforts but urges the nation’s elected leaders to address the root causes of medical debt and protect consumers.