Stronger protections for people with unpaid medical debt pass in NC Senate
Unpaid medical bills have landed massive numbers of North Carolinians in debt collections — in some rural parts of the state, over 40% of the population. On Monday the state Senate passed a bill aimed at helping future patients avoid a similar fate.
It passed 48-0.
"This bill is a pro-family, anti-poverty bill," said Sen. Joyce Krawiec (R-Forsyth), the lead sponsor. "It is consumer-friendly bill."
Hospitals would be limited from moving as aggressively as they can now to collect debts under Senate Bill 321. Among other changes, it would set up an appeals process for patients and make it easier for people who qualify for financial aid to learn about and receive that aid.
Most North Carolina hospitals are nonprofits, so they can write off unpaid bills from their taxes as charitable care. But for years, hospitals all around the state have been regularly accused of pursuing the debts of people whose bills should’ve been written off as charity care.
For those in arrears, being sent into collections doesn’t just mean a lower credit score — which makes it more expensive for people to later get a car or home loan — but can also mean garnished income, liens and other legal troubles.
In addition to giving patients more rights, the bill would also block family members from being saddled with their loved ones’ debts to hospitals and nursing homes after they die.
The hospital lobby opposes the bill. The N.C. Healthcare Association contends that there are already enough rules on the books regulating how hospitals can deal with unpaid bills, and that regardless, the blame lies more with insurance companies — which often charge large deductibles or refuse to cover expensive procedures.
A 2022 study by The Urban Institute found that North Carolina has among the worst problems with unpaid debt of any state in the country — largely because of North Carolina's failure over the last decade to pass Medicaid expansion, unlike most other states.
North Carolina did tentatively approve Medicaid expansion earlier this year in a bipartisan vote, but it won’t go into effect unless this year’s state budget also becomes law — a vote that’s expected to happen sometime this summer.
