North Carolina considers new laws to 'de-weaponize' medical debt, protect patients

North Carolina lawmakers debated two measures to reduce healthcare debt: one to expand Medicaid coverage and another to strengthen financial protections for patients. If both pass, policy experts say that North Carolina could emerge as a national leader in protecting patients against medical debt and aggressive collection practices. 

"Medical debt can drive people into poverty and prevent people and their families from getting out of poverty," said Mark Rukavina, a program director with the nonprofit health advocacy group Community Catalyst. These bills could provide "significant protection" against that.

The North Carolina Senate passed the bill that includes Medicaid expansion. According to NPR, Senate leader Phil Berger said an increase in federal funds to encourage states to expand the program, along with a recent overhaul of the state's Medicaid program to make it more efficient, ensured that doing so would no longer hurt the state's budget. Although the bill faces an uphill battle in the House, it could provide insurance coverage to more than 500,000 people.

The second piece of legislation, known as the Medical Debt De-Weaponization Act, would require hospitals to offer financial assistance to patients based on their income and limit the way large medical facilities and debt collectors can pursue unpaid bills. It features a host of provisions championed by consumer advocates, including the following:

  • Require hospitals to provide free care to patients whose household income is at or below 200 percent of the federal poverty level.
  • Require hospitals to offer patients payment plans that span at least two years, with installments that don't exceed 5 percent of their monthly income.
  • Cap the annual out-of-pocket expense for most patients at $2,300.
  • Cap the maximum interest rate on medical debt at 5 percent.
  • Shield family members from medical or nursing home debt incurred by a spouse or parent.
  • Delay reporting of unpaid medical debts to credit bureaus until one year after a patient is billed.
  • Prohibit home foreclosures related to medical debt.
  • Require the attorney general to enforce the law and give patients the ability to sue health care facilities for violations.

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