North Carolina Gov. Josh Stein announced Monday that the state’s medical debt relief initiative has eliminated roughly $6.5 billion in medical debt for 2.5 million North Carolinians.
The program, launched under former Gov. Roy Cooper last July, has far surpassed its initial projection of $4 billion in alleviated debt, and Stein and Health and Human Services Secretary Dev Sangvai said they will continue to search for debts to alleviate.
Focused on debt deemed “uncollectible,” the relief program incentivized the state’s 99 acute care hospitals to relieve medical debt for low- and middle-income patients and expand charity care policies as conditions for receiving higher payments through Medicaid’s Healthcare Access and Stabilization Program. The state also instructed hospitals to stop reporting medical debt to credit agencies.
Former Gov. Roy Cooper, pictured during a roundtable about health care costs and Medicaid at Chavis Community Center in Raleigh, North Carolina on Sept. 19, 2025, led the effort to obtain medical debt relief under his tenure as governor. (Photo: Galen Bacharier/NC Newsline)“For many people, the debt service serves as an anvil holding them back from opportunity and a better life, from getting a mortgage or a small business loan,” Stein said in a news conference at the Executive Mansion. “Unlike most other forms of debt, medical debt is not a choice. Nobody chooses to have a heart attack or get diagnosed with a chronic condition — you just have to deal with it.”
Stein thanked Cooper and former Health and Human Services Secretary Kody Kinsley, the latter of whom was in attendance, for spearheading the “first-of-its-kind” initiative to use federal health care funds as leverage to change hospitals’ debt policies.
“Most of the debt had been on the books for years. It only served to deprive people who had no way of paying back of a brighter financial future,” he said. “If they could have paid, they would have paid.”
The North Carolina Healthcare Association, an advocacy group for the hospital industry, didn’t immediately respond to a request for comment.
The program was able to surpass its initial forecast as participating hospitals found additional debt that could be relieved through the review process that was not included in the initial negotiation between NCDHHS and health care providers, Stein said, adding that he expects that number to grow as hospitals continue the relief process.
To inform North Carolinians that their debt has been erased, NCDHHS has partnered with charity Undue Medical Debt to send explanation letters to those impacted. Undue Medical Debt is set to mail more than 250,000 letters this week informing residents they no longer owe their balances.
“I am particularly proud to highlight that North Carolina’s approach is particularly unique because it facilitates, in the short term, debt relief for families today, while incentivizing long- term policy changes that will end the cycle of medical debt by attacking it at its root cause, ending it before it even starts,” said Undue Medical Debt board vice chair Jose Penabad.
North Carolina Health and Human Services Secretary Dev Sangvai said in a press conference Monday, Oct. 13, 2025 that the medical debt relief program is designed to prevent future debt from accumulating rather than providing a “one-time fix.” (Photo: Brandon Kingdollar/NC Newsline)Stein also used the news conference Monday to reiterate calls for the North Carolina General Assembly to fully fund the state’s Medicaid program and for Congress to renew Affordable Care Act subsidies. “We have so much work to do to improve people’s health and financial wellbeing,” Stein said.
While the program is based on conditioning federal dollars for hospitals, the ongoing government shutdown has not impacted the debt relief efforts, Sangvai said.
He added that NCDHHS will continue to evaluate the effects of the One Big Beautiful Bill Act and its changes to Medicaid and HASP, but the debt relief policy changes at the hospital level help ensure the sustainability of the program regardless of federal health care policy.
“This is not a one-time fix,” Sangvai said. “It is a sustainable model that will continue to reduce debt burden and improve access to care for the years ahead,” Sangvai said.
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