RALEIGH, NC – When Erin Williams-Revis faced a $ 3,500 surgery bill, the hospital offered to pay her $ 300 in monthly installments. Williams-Revis, 44, who lives in Greensboro, about an hour west of the state capital, said it was too much. Her time as a personal assistant was spent, and she and her husband were behind the bill, even asking for tolerance in their mortgage.
In Charlotte, Patrick Oliver was shocked to receive a bill of about $ 30,000 after traveling to the emergency room for numbness and burning in his arms and legs. When Oliver, 66, and his wife, Mary, could not pay, the hospital sued them. The couple feared they would lose their home.
In Asheville, Emmaleigh Argonauta’s বিল 25.72 medical bill was sent to the collection. He said he paid the bill but the hospital system did not record it. Argonauta took eight months, many calls and a whole day to settle the debt in the email and billing office.
Now, they’re all waiting to see if North Carolina lawmakers will do well on a bill that sponsors say will “disarm medical debt.”
According to a KFF survey conducted for a new KHN-NPR investigation, approximately 100 million people in the United States – 41% of adults – have some form of healthcare debt. The problem is that millions of people are going bankrupt, reducing savings and retirement accounts and leaving black marks on credit scores that make it difficult to find housing or employment, the investigation found.
But federal security remains weak. And the broader understanding has encouraged efforts by at least a dozen state legislatures in recent years to better protect patients. California, Maine, and Maryland have taken steps to force hospitals to expand financial aid, crack down on debt collectors, and curb extreme practices such as installing liens in patients’ homes.
Many of these states have expanded Medicaid coverage through the Affordable Care Act, providing serious financial protection to millions of previously uninsured people.
But some states, including Texas, South Carolina and Tennessee, have some protections, including the highest levels of medical loans. The low-income, black and indigenous peoples of these southern states are the most affected. But even in more liberal states like California, the healthcare and debt collection industries have thwarted more ambitious reform efforts.
According to Credit Bureau data analyzed by the nonprofit Urban Institute, the debt problem in North Carolina is the most acute in the country. Only five states have a higher proportion of medical debt residents in their credit reports.
North Carolina lawmakers are debating two steps to tackle the state’s debt problem: expanding Medicaid, a government insurance program for low-income people, and strengthening patient financial protection. If both pass, policy experts say North Carolina could emerge as a national leader in protecting residents against medical debt and aggressive collection practices.
Mark Rukavina, program director at Community Catalyst, a non-profit health advocacy group, said: These bills could provide “significant protection” against it.
Currently, the University of North Carolina ranks 28th on the National Scorecard for Medical Loan Policy created by the Innovation for Justice Lab of the University of Arizona and the University of Utah. If the North Carolina legislature passes both bills, the state will move to second place, said Gabriela Elizondo-Craig, chief investigator of the scorecard project. That would put it in front of California and just below Maryland, the only state in the scorecard that prohibits hospitals from selling medical loans to other companies.
The North Carolina Senate has passed a bill that includes a Medicaid extension, with Republicans, who previously opposed the move, backing it. Senate leader Phil Berger told a news conference that the increase in federal funding to encourage states to expand the program, including a recent overhaul to make the state’s Medicaid program more efficient, has ensured that doing so will no longer hurt state budgets. . Although the bill has faced ups and downs in the House, it could provide insurance coverage to more than 500,000 people.
“Medicaid’s expansion will go beyond hospital costs,” said Jennifer Bosco, an attorney at the National Consumer Law Center who co-authored a model state law on medical debt. “It will touch on all healthcare costs and pharmacy costs, which really has the potential to reduce or eliminate a lot of medical debt for low-income people.”
The second part of the law, known as the Medical Debt-Depreciation Act, requires hospitals to provide financial assistance to patients based on their income and to limit large medical facilities and the way borrowers can follow unpaid bills. It contains a number of provisions championed by consumer advocates, including:
- Hospitals are required to provide free care to patients whose family income is 200% or below the federal poverty level and whose patients have a sliding-scale discount for higher incomes. (Currently, this means that a single person earning less than $ 27,180 or a family of four earning less than $ 55,500 will be eligible for free care.)
- Offering patients a payment plan that is valid for at least two years, with no more than 5% of their monthly income in installments.
- Capping at an annual pocket cost of $ 2,300 for most patients
- Setting a maximum interest rate of 5% on medical loans
- Protecting family members from medical or nursing home loans taken by a spouse
- Delay in reporting unpaid medical loan to a credit bureau up to one year after a patient pays the bill
- Banning home foreclosures on medical loans
- The need for an attorney general to enforce the law and to empower patients to sue for health care violations
Quinn Chi Nguyen, a senior policy analyst at Community Catalyst, says at least a dozen states have passed laws with similar provisions in recent years. By 2021, 10 states – including California, Illinois and Maine – require hospitals to provide free or discounted care to patients who meet certain income thresholds. Thirteen states and Washington, D.C., limit the practice of various debt collection. In New Mexico, hospitals are prohibited from suing patients with incomes below 200% of the federal poverty level, holding liens on their property, or adjusting their wages. In Nevada, lenders are required to provide written notice to patients at least 60 days prior to taking any action. Other state policies have focused on price transparency or limiting the impact of debt on people’s credit scores and livelihoods.
Earlier this year, three major credit-reporting agencies announced that they would remove less than $ 500 worth of medical loans and payments from consumer credit reports. The Biden administration has advised federal lenders not to consider medical loans anymore when evaluating loan applications.
Together, these policies could reduce the number of people driven into poverty by medical bills or retain generation after generation because of medical debt, Nguyen said.
The North Carolina Medical Loan Act was encouraged by multiple reports from the Treasurer’s Office, which found that hospitals billed about $ 150 million to patients who should be eligible for free or discounted care under the hospital’s policy. A previous KHN investigation found similar trends nationwide.
“People in North Carolina are not seeing themselves out of poverty, not because of the war in Ukraine or because of inflation,” said State Treasurer Dale Fowell, “but because of medical debt.”
State Republican Ed Goodwin, a Republican who sponsored the bill and represents two North Carolina counties with the highest share of medical debt residents, said he believes there is bipartisan support in tackling the problem. Goodwin suggested that perhaps the bill would be easier to sell than the Medicaid expansion – which he said had been discussed for years “and nothing completely happened.”
But that doesn’t mean it will be a smooth sail.
At a committee hearing in early June, Republican state Republican John Szoka said “a lot of” things in the bill made him “extremely upset.” He questioned whether a credit score could significantly harm someone’s upward mobility, noting that federal law already requires nonprofits to provide financial assistance to hospitals. “I don’t want to see any hospital turn into a social service,” he added.
Similar legislation in other states has been opposed by powerful hospital associations, and groups representing debt collectors have often criticized such protections.
The North Carolina Healthcare Association, which represents state hospitals, said it had not yet taken an official position. But spokeswoman Cynthia Charles said existing federal and state laws address many issues related to fair billing and procurement.
“Hospitals do more than any other part of the healthcare sector to help vulnerable patients,” he wrote in a statement to KHN. They try to make it easier for patients to learn about financial aid through counselors, call centers, virtual chat tools and more, he said, but it is “a two-way process” and patients must provide financial information to be eligible.
The North Carolina Collectors Association declined to comment.
For people with excessive medical bills, the law may not come fast enough and may not go far enough.
Emmaleigh Argonauta, who was sent to the collection on that erroneous 26 bill, said the law requires hospitals to provide an itemized bill for each patient, without waiting for them to request it.
Patrick and Mary Oliver, who were sued at a hospital, said health care providers needed to be more clear about the cost of services in advance and that those costs had to be justified.
Erin Williams-Revis, who was offered a $ 300 monthly payment plan for her surgery bill, said lawmakers should talk to more “ordinary people” when amending the law “because we are the losers.”
The medical loan bill is currently being reviewed by the House Banking Committee, where it may be amended. With legislation in this session, the bill has only two weeks left to pass through the North Carolina House and Senate.
KHN senior correspondent Noam N. Levey contributed to this report.
About this project
“Diagnosis: Debt” is a reporting partnership between KHN and NPR that explores the scale, impact, and causes of medical debt in the United States.
The series draws on the “KFF Health Care Date Survey”, a poll designed and analyzed by KFF public opinion researchers in collaboration with KHN journalists and editors. The survey was conducted online and by telephone in English and Spanish from February 25 to March 20, 2022, in a nationally representative sample of 2,375 U.S. adults, including 1,292 adults with current healthcare debt and 382 adults with healthcare debt. The last five years. The margin of sample error is plus or minus 3 percentage points for full sample and 3 percentage points for those who have current debt. For results based on subgroups, the margin of sample error may be higher.
Additional research was conducted by the Urban Institute, which analyzes data from the Credit Bureau and other demographics on poverty, race and health status to find out where medical debt is concentrated in the United States and what factors are involved with high debt levels.
The JPMorgan Chase Institute has analyzed records from a sample of Chase credit card holders to see how the balance of customers may be affected by major medical expenses.
KHN and NPR reporters also conducted hundreds of interviews with patients across the country; Talks with physicians, healthcare industry leaders, consumer lawyers, debt lawyers and researchers; And review studies and survey scores about medical loans.