North Carolina has eliminated over $6.5 billion in medical debt for more than 2.5 million residents through a state government initiative. This program, launched 15 months ago, provides hospitals with additional federal funds if they offer financial relief to low- and middle-income patients and implement policies to prevent future debt accumulation. The initiative, part of the Healthcare Access and Stabilization Program and linked to Medicaid expansion, exceeded initial estimates, which predicted helping around 2 million people with $4 billion in debt.
The debt, previously held by hospitals and difficult to recover, will be removed from credit reports, offering individuals and families a fresh financial start after medical crises. Recipients are expected to have an average of $2,600 in debt erased, allowing them to focus on their health without financial stress. Hospitals participating in the program alerted many patients to their canceled debt, and a national organization is sending out further notices.
The program allows certain hospitals to receive higher reimbursement rates for treating Medicaid enrollees in exchange for participating in medical debt initiatives. Hospitals agreed to eliminate medical debt dating back to early 2014 for Medicaid enrollees and will also eliminate other debt for non-enrollees based on income levels. They are also required to implement measures like automatic enrollment in charity care and curbing debt collection practices to discourage future liabilities. The total debt erased includes direct relief and changes in hospital policies. While other state... download the app to read more
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