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last mo.

North Carolina Erases $6.5 Billion in Medical Debt for 2.5 Million Residents

A CMS-approved plan conditioned higher Medicaid payments on hospital debt relief to produce the outcome.

North Carolina Gov. Josh Stein, center, flanked by Health and Human Services Secretary Dr. Dev Sangvai, left, and Undue Medical Debt Vice Chair Jose Penabad, speaks about the elimination of medical debt through an initiative involving hospitals and Medicaid at the Executive Mansion in Raleigh, N.C., Monday, Oct. 13, 2025. (AP Photo/Gary D. Robertson)
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Overview

  • Gov. Josh Stein announced the relief total, which surpasses initial projections of $4 billion for 2 million people, with recipients averaging about $2,600 erased.
  • All 99 eligible hospitals joined the initiative, which required forgiving qualifying debts dating back to 2014, automatically screening patients for charity care, and curbing aggressive collections and credit reporting for low-income patients.
  • Hospitals and the nonprofit Undue Medical Debt are notifying beneficiaries, with roughly 255,000 letters going out this week and additional notices to follow.
  • The $6.5 billion figure reflects debt canceled through the program and additional eliminations as hospitals updated policies to comply with the requirements.
  • State officials describe the model as ongoing and sustainable, while the North Carolina Healthcare Association warns that recent and proposed policies could add financial pressures that affect hospital services and taxpayers.