Feds Approve Plan To Get NC Hospitals To Forgive Medical Debt

The Biden administration yesterday said it signed off on a plan under which North Carolina will give hospitals additional Medicaid funds if they forgive the medical debt of approximately 2 million residents. Via Axios:

It's the latest administration move on an issue closely linked to Americans' broader economic concerns and comes on the heels of a separate proposal unveiled last month to wipe medical debt from 15 million people's credit reports.

North Carolina Gov. Roy Cooper (D) said the plan has the potential to relieve as much as $4 billion in existing medical debt dating back to the beginning of 2014.

It would cover Medicaid recipients and individuals not enrolled in Medicaid with incomes at or below at least 350% of the federal poverty level ($109,200 for a family of four), or for whom total debt exceeds 5% of annual income.

Hospitals that accept the additional funds would also have to agree to discount medical bills on a sliding scale for patients with incomes at or below 300% of the federal poverty level, or $93,600, and automatically enroll people into financial assistance, known as charity care.

They are also barred from selling any medical debt for consumers with those incomes to debt collectors.

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