North Carolina’s landmark medical debt relief initiative continues to make waves, with Gov. Josh Stein highlighting its impact during a roundtable discussion this week in Greensboro, N.C.. The program, the first of its kind in the nation, has erased more than $6.5 billion in medical debt for 2.5 million residents, a sweeping effort to relieve financial strain and prevent future medical debt accumulation. At the same time, Gov. Stein has called on the credit reporting agencies to further protect consumers by not including medical debt on credit reports.
Why this matters: Launched in 2024 through a collaboration between the North Carolina Department of Health and Human Services, 99 acute care hospitals, and nonprofit partner Undue Medical Debt, the program leverages federal Medicaid funding rather than state dollars. Participating hospitals were required to adopt more generous charity care policies, end medical debt credit reporting, and relieve debt for low- and middle-income patients to qualify for enhanced payments under the federal Healthcare Access and Stabilization Program (HASP).
Gov. Stein emphasized that the initiative is not only about clearing old bills but also about reforming how hospitals handle medical debt moving forward. “At a time when many Americans are just one emergency medical expense away from going into debt, this relief program is putting more than 2.5 million North Carolinians on the path to financial security,” Stein said.
As part of the effort, Stein this week sent letters to Equifax, Experian, and TransUnion urging them to recommit to, and expand, their voluntary 2022 policies limiting the reporting of medical debt. He called on the credit bureaus to go further by removing all medical debt from consumer credit files, noting that medical debt is often involuntary and not predictive of creditworthiness.
The governor’s appeal follows the CFPB’s recent rollback of earlier guidance that discouraged the inclusion of medical debt in credit reports. Stein warned that confusion could arise among the millions of North Carolinians whose debts were forgiven if credit bureaus do not clearly communicate updated reporting practices.
NCDHHS Secretary Dev Sangvai said the state’s approach is designed not just to erase debt but to prevent future debt from forming. “North Carolina’s groundbreaking program lifts this unnecessary burden and puts into place policies to prevent low- and middle-income North Carolinians from incurring medical debt in the future,” Sangvai said.
Governor Stein framed the initiative as both economic and moral policy: “This program takes a big burden off people, but it doesn’t solve the problem. We still need systemic reforms to ensure North Carolinians can get the care they need without the fear of financial ruin.”
