In three charts, see how NC’s medical debt relief is reaching patients statewide
AI-generated summary reviewed by our newsroom.
- State program erased $6.5B for 2.5M patients using Medicaid-linked hospital reforms.
- Relief concentrated in Mecklenburg where hospitals wiped out hundreds of millions.
- Federal changes may end state leverage for mandatory charity-care and billing rules.
Much of North Carolina’s medical debt relief under the state’s debt-forgiveness program has been concentrated in Mecklenburg County — home to Charlotte, the state’s most populated city, and hospitals run by major systems such as Atrium Health and Novant Health, which have erased more than $1 billion in patient debt.
But some smaller counties have seen large amounts of relief.
In Pitt County, ECU Health Medical Center eliminated about $585 million in debt for roughly 270,000 people — even though the county’s total population is about one-seventh the size of Mecklenburg’s. The debt relief covers unpaid medical bills dating back to 2014.
Hospitals in Forsyth County have provided over $500 million in debt relief. Wake, the state’s most populated county, has seen just over $100 million.
That’s according to a News & Observer analysis of new data from the state Department of Health and Human Services, which shows where people have received the most help and how much relief they’ve seen.
Statewide, more than $6.5 billion in hospital medical debt has been erased for about 2.5 million North Carolinians through the Medical Debt Relief Program, an initiative that includes all of North Carolina’s 99 acute care hospitals.
Announced last year, the program leverages Medicaid funds to reimburse participating hospitals in exchange for reforms meant to both eliminate existing medical debt for many North Carolinians and prevent patients from falling back into it.
Who it helps
The program helps Medicaid patients and many lower-income families, but leaves out people with newer bills, those who owe money to non-hospital providers, and some middle-income North Carolinians who still struggle with care they can’t afford.
In particular, hospitals, which all opted into the program, are required to:
- Forgive hospital debt for Medicaid patients dating back to 2014.
- Erase older hospital debt for other lower-income patients — specifically, people with incomes at or below 350% of the federal poverty level, or those whose hospital debt exceeds 5% of their income. That relief applies to medical debt more than two years old, dating back to 2014.
Those at or below 350% of the federal poverty level include a single adult earning under roughly $50,000 a year, or a family of four earning under about $100,000.
Who it leaves out
Many people who earn above the income cutoff can still face hefty bills. High-deductible insurance plans can also leave patients paying thousands of dollars out-of-pocket before coverage begins.
That’s the case for Randall Edge, 54, of Raleigh, who was billed about $1,800 for anesthesia after a colonoscopy he believed would be fully covered as preventative care by his high-deductible insurance plan. That older bill was later erased through the state’s medical debt relief program because of his income, according to Undue Medical Debt, the nonprofit partnering with North Carolina on the initiative.
Edge works for a heating, ventilation and air conditioning company and earns about $50,000 a year, supporting a family of four that includes an autistic stepson and a granddaughter. His wife is uninsured because adding her to his plan would increase his weekly premium from about $50 to roughly $200, he said. He has also paid thousands out-of-pocket for skin-cancer treatment in 2021.
This year, Edge needed another routine colonoscopy and said he checked beforehand to ensure anesthesia would be covered. But he recently received a new bill of more than $1,000, which Undue Medical Debt told The N&O is likely too recent to qualify for relief.
“I live week to week, and right now, if an emergency was to come up, right now, I don’t have any money to pay,” Edge said.
Jonathan Kappler, deputy secretary for external affairs at the state’s Department of Health and Human Services, said the relief so far includes both Medicaid beneficiaries and those who qualify based on income. For the income-based portion of the program, hospitals are working with Undue Medical Debt to identify eligible patients and erase what they owe. The group helps hospitals flag qualifying accounts and sends letters notifying people that their debt has been forgiven.
North Carolina set income eligibility at 350% of the federal poverty level. But Undue Medical Debt typically uses a 400% threshold, Kappler said, so some hospitals have expanded the relief to cover patients in that higher-income range.
Hospitals were required to begin with Medicaid debt, he said, but many have already expanded to the income-based group. Because hospitals report totals combined, the state can’t yet separate how much relief has gone to each category, he said.
Kappler said hospitals report progress twice a year, with the latest update submitted in late September and the next due in the spring.
“This is probably the bulk of the relief we’ll see,” he said. “But more is expected over the next year — and many hospitals jumped on this quickly.”
Total medical debt in North Carolina
As for the total amount of medical debt North Carolinians carry, that remains murky.
“When we started this work last year, it was clear that the whole charity-care and medical-debt space was very opaque, and there was not a lot of clarity about how much medical debt there was out there,” Kappler said. “We’re glad that we now have some robust data to work with, and we’ll continue to have that based on the reports that the hospitals are submitting to us, but it is still only kind of a fortunate window into this space, and it is not the complete picture.”
Kappler said DHHS focused the program’s reporting requirements for hospitals on low- and middle-income patients who are least able to pay, because medical debt can fuel “a cycle of poor physical, mental and financial health.” But for keeping track of debt owed by people who have “the capacity to pay” their bills, he said, that’s outside the state’s purview under this program.
North Carolina has long had among the highest rates of medical debt in the nation, according to 2024 reporting by The Charlotte Observer and KFF Health News. As many as 3 million adults likely carried such debt at the time, KFF polling and credit bureau data suggested.
New protections aimed at preventing future debt
Beyond the debt relief, hospitals were also required to adopt new policies to keep patients from falling into medical debt.
That includes automatically applying discounts based on income or enrollment in government food benefits programs such as SNAP or WIC, banning the sale of medical debt owed by many patients, and ending the reporting of medical debt to credit agencies, among other policies, according to the state Department of Health and Human Services website.
DHHS now requires hospitals to report how many patients qualify and the dollar amount of aid they receive.
Kappler said the department is also working with community organizations to spot problems that need to be addressed.
Federal changes that could weaken protections
Hospitals that participate in the medical debt program receive enhanced payments through the state’s Healthcare Access and Stabilization Program, or HASP, which was created when the state expanded Medicaid in 2023.
Medicaid is funded by both the state and federal government. In North Carolina, hospitals cover the state’s share of expansion costs through a provider tax.
HASP works by increasing what the state pays hospitals for treating Medicaid patients. That higher payment brings in more federal matching dollars.
The medical debt initiative is tied to that funding. Hospitals qualify for enhanced HASP payments only if they erase eligible medical debt and strengthen their charity-care and billing practices.
The One Big Beautiful Bill, a federal law passed earlier this year to enact President Donald Trump’s agenda, makes several changes to Medicaid, including placing limits on how states use Medicaid payment programs like HASP to draw down extra federal funding.
Kappler said that the federal reconciliation law will eventually cut off the mechanism North Carolina is using to require debt forgiveness and charity-care protections. The state will lose that leverage “a few years down the road,” he said.
The retrospective debt relief will be done by then, so that piece won’t be affected, he said.
But once the changes take effect, the state will no longer be able to force hospitals to maintain the new charity-care standards, he said.
Kappler said he is “confident” hospitals will continue those policies voluntarily because they have seen “the value of this for themselves and for their communities.” He said it’s rare for hospitals to backtrack and make charity-care policy less generous.
“Even if all of this goes away in future years, the overall impact will have been enormous in the state and our position nationally,” he said.
