The Official Scoop: North Carolina’s Debt Relief Initiative

The North Carolina Department of Health and Human Services (NCDHHS) has implemented a major medical debt relief initiative. This is not a proposal—it’s an approved program where hospitals participate to receive enhanced payments through the Healthcare Access and Stabilization Program (HASP).

Here is the bottom line: The state is leveraging its Medicaid program to incentivize hospitals to forgive historical medical debt and adopt more generous charity care policies. If you were treated at a participating hospital (which includes all eligible hospitals in the state, like Atrium and Novant) and meet the income criteria, your old debt may be eligible for relief.

The Reality Check: Why This Matters

Let me tell you why you need to be aware of this program. Imagine you had a $4,200 bill from an ER visit in 2023 that had gone to a collections agency.

You might receive a “Final Notice” threatening a lawsuit and feel pressured to pay a bill you can’t afford.

Here is the kicker: Under the NC program, that debt might have already been identified for forgiveness by the hospital as part of its agreement with the state. A collector might still try to squeeze a payment out of you. Don’t pay a cent on old medical bills until you verify your status under this program.

Who Qualifies? The Income Limits for Relief

This relief is tied to your income and the date of service. Hospitals will forgive uncollectible medical debt dating back to 2014 for patients with household incomes at or below 350% of the Federal Poverty Level (FPL). Additionally, hospitals must offer free care to patients with incomes at or below 200% FPL and significant discounts for those up to 300% FPL.

Check the table below. If you earn less than the number in the right column, your old, uncollectible debt is likely eligible for forgiveness.

The Relief Process: Step-by-Step

The state advises that patients do not need to take any action to have their debt relieved. Hospitals are working with third-party vendors to identify and cancel eligible debt. However, you should be proactive.

Step 1: Check Your Status

Log into your hospital patient portal (MyChart, etc.) and look for changes to the balance on old accounts. You can also contact the hospital’s billing or financial assistance department directly to inquire about your eligibility under the medical debt relief initiative.

Step 2: Pull Your Credit Reports

You need to see if any collections accounts from NC hospitals are still reporting to TransUnion, Equifax, or Experian. Under the program, this reporting should cease.

👉 Get Your Free Credit Reports

Step 3: The Dispute

If the debt is still on your credit report, send a dispute letter referencing the NC Medical Debt Relief Program. State clearly that the debt is from a participating hospital and is subject to new reporting and collection restrictions.

Deadlines & Expiration

The program is a multi-year initiative. Hospitals were required to enter into agreements with debt relief partners by March 1, 2025. Forgiveness for debt owed by current Medicaid enrollees is effective July 1, 2025. The full implementation will occur over two years. Patients should be receiving letters if their debt has been forgiven. Act now to check your status.

📚 Official Resources & Forms

• NC DHHS Medical Debt Page – The official government landing page verifying the hospital incentive program.
• NC Attorney General Consumer Protection – File a complaint here if a debt collector ignores the new law.
• North Carolina Justice Center – Non-profit offering legal aid guidance for debt defense in NC.
• Federal Poverty Level (FPL) Charts – Official data to calculate your income threshold.

🙋‍♂️ Frequently Asked Questions (FAQ)

Does this wipe out credit card debt used for medical bills?

No. This is the biggest trap. If you paid your hospital bill with a Visa or Mastercard, that debt is now “consumer debt,” not “medical debt.” The NC forgiveness program only applies to debt owed directly to hospitals or their assigned collection agencies.

Is the forgiven debt considered taxable income?

No. The state has indicated that patients will not experience any tax implications from this debt relief.

What if I am already being garnished?

If you have an active wage garnishment for a medical debt that should have been wiped out under this program, you need to contact the Clerk of Court in your county and seek legal assistance immediately. The judgment may need to be vacated based on the new relief criteria.

Don’t let a collector pressure you. Check your eligibility for this program and protect your hard-earned cash.