Medical debt relief of up to $4B possible for 2M North Carolinians

(The Center Square) – As much as $4 billion in debt for up to 2 million North Carolinians accumulated over the past 10 years can be eliminated, the U.S. Centers for Medicare and Medicaid Services says.

The state Department of Health and Human Services will have responsibility to execute enhanced Medicaid reimbursement payments through the Healthcare Access and Stabilization Program. Lawmakers approved it last year.

The debt relief proposal was met with approval by state Treasurer Dale Folwell when announced July 1. The North Carolina Healthcare Association, an organization representing “individual and multi-hospital health systems,” says it advocated for Medicaid expansion for a decade and helped legislators craft House Bil 76 turning it into reality.

In a statement emailed to The Center Square on Monday, the association said, "As hospitals and health systems individually weigh their ability to participate in Governor Cooper’s medical debt initiative, for the full HASP payment, NCHA remains committed to working alongside our partners to advocate for sustainable solutions that engage all, help support the state’s health care safety net, and do no harm."

The association said it was notified on Friday of the approval. The program is approved for fiscal years 2024 and 2025, authorizing additional federal funds to hospitals to fund the nonfederal share of Medicaid expansion.

The association said, "The approvals include a requirement that hospitals agree to a Department-developed medical debt and charity care policy to receive the full amount of authorized funds."

Republicans in the General Assembly for the longest time fought the battle against expanding Medicaid. They did so last year by tying implementation of the two-year state budget to one of Gov. Roy Cooper’s two most important wishes – public education is the other.

Medicaid expansion was implemented Dec. 1.

“Many people struggle with the burden of medical debt, which can cause them to hold off on getting the essential health care and services they need,” said Dr. Kody Kinsley, the secretary of the state Health and Human Services Department.

Hospitals can get higher levels of reimbursement in exchange for relief of medical debt on Medicaid enrollees doing back to 2014. For those not enrolled in Medicaid and at certain incomes or with debt above 5% of their annual income, debt can be relieved, and hospitals can receive reimbursement at a higher level.

Cooper said “medical debt is not intentional because people don’t choose to get seriously ill or have an accident.” The ability to pay, facing ruined credit, even bankruptcy can be the result, he said.

Hospitals have a choice for participation. Those that decline receive Medicaid reimbursement at base level in the Healthcare Access and Stabilization Program.

Folwell, unsuccessful in the Republican primary in his quest to become governor, said earlier this month he appreciated the “pro-family initiative.” He encouraged Cooper to “convince the hospital association to drop their opposition” to the “pro-consumer legislation.”