NC Newsline – Medicaid enrollees began receiving letters from hospitals last month telling them their old medical debts have been erased.
That medical debt relief is part of the program former Gov. Roy Cooper and the former head of the state Department of Health and Human Services announced last year that increases hospitals’ Medicaid payments in exchange for erasing debts amassed by people with lower incomes.
Debt relief letters will go out in phases and continue into next year, Julia Lerche, chief strategy officer and chief actuary for NC Medicaid said in an interview Friday.
The state Department of Health and Human Services is collecting information from hospitals on the numbers of people whose medical debts have been erased, along with total debt abolished, and will have a report in the next few months, she said.
“We are really proud of the program,” Lerche said. “We know how much it means to so many people in North Carolina.”
Under the program, hospitals are forgiving Medicaid enrollees’ medical debts dating back to 2014. Former DHHS Secretary Kody Kinsley said last year that as people were signing up for expanded Medicaid, they talked about the heavy weight of old medical debts.
Hospitals will erase medical debt dating back to 2014 for people who are not enrolled in Medicaid but whose incomes are at or below 350% of the federal poverty level or whose total debt is more than 5% of their yearly income. Hospitals also agreed to provide discounts to patients who meet income guidelines.
Hospitals and Undue Medical Debt, a nonprofit that works to wipe out such debts, are looking at available income data to determine who is eligible to have their debts erased.
As part of the program, hospitals had to agree to measures that would help people from going into debt in the first place, agree not sell to collectors the debts of people whose incomes are below 300% of the federal poverty level, or to report patients covered under the policy to credit reporting agencies.
North Carolina has federal approval to run the program through June 2026, Lerche said.
The program may eventually erase $4 billion in medical debt.
