State Spotlights | Nov 1, 2024

State Spotlight: North Carolina’s Comprehensive Medical Debt Relief and Reform Incentive Program

Laura Buddenbaum and Heather Howard, State Health and Value Strategies

In an innovative, first-of-its kind approach, North Carolina is tackling the issue of medical debt through a comprehensive initiative that pairs immediate relief with long-term reform. By leveraging federal funding through the Medicaid program, hospitals are incentivized to cancel existing medical debt—up to $4 billion for approximately two million low-income North Carolinians—and enact a series of policies to prevent the future accumulation of medical debt, such as financial assistance requirements. Notably, all 99 eligible hospitals elected into the optional program. This state spotlight provides an overview of North Carolina’s medical debt relief incentive program, underscores the unique efforts of the state to achieve buy-in from stakeholders, and highlights the opportunity as a model for other states.