North Carolina Erased $6.5 Billion In Medical Debt

Jessica McIntyre, a school social worker in Beaufort County, North Carolina, spent years making sporadic payments on thousands of dollars of medical debt from a week-long hospital stay after postpartum eclampsia following the birth of her son in 2018. Eventually she fell behind, stopped paying, and watched her credit score drop after the hospital sold the debt to a collections agency. Last year she received a letter in the mail from a nonprofit called Undue Medical Debt claiming her remaining $3,200 balance had been fully erased. Her first reaction was disbelief. She said she thought this stuff doesn't happen to me, that it can't be real. It was real. McIntyre is one of more than 2.5 million North Carolinians who have had a total of $6.5 billion in medical debt cancelled under the state's Medical Debt Relief Program, a first-of-its-kind initiative launched in July 2024 that partnered the North Carolina Department of Health and Human Services with all 99 of the state's eligible acute care hospitals and the nonprofit Undue Medical Debt, using federal Medicaid incentive payments to motivate hospitals to wipe uncollectible debt from their books while simultaneously reforming how they handle charity care going forward.

The program's mechanics make the scale possible: Undue Medical Debt purchases portfolios of outstanding medical debt from hospitals and collection agencies at a small fraction of face value, typically around one cent for every dollar owed, and then cancels that debt entirely rather than collecting on it, meaning relatively modest investments of public and private funds can wipe out enormous totals. Participating hospitals also agreed to stop selling debt owed by low-income patients, remove existing medical debt from credit reports, and automatically screen patients for financial assistance, shifting the burden of navigating the system away from patients and onto the institutions. Letters are still going out across the state as hospitals and Undue work through their remaining debt portfolios, and at least 255,000 were sent in a single week this October alone. The program has also inspired local communities to expand the model independently: a church in Chatham County raised $22,000 through a community campaign, which Undue used to cancel $1.8 million of local medical debt, with an anonymous donor pledging a three-to-one match of every additional dollar raised. Eva Stahl of Undue said the impact ranges from the pragmatic, restoring access to credit and housing, to the quietly personal: being able to go out to dinner or buy a Christmas gift without anxiety, and feeling, as she described it, a sense of hope and relief.

Source:https://carolinapublicpress.org/75990/medical-debt-relief-undue-nc/