Millions in North Carolina would be eligible for discounted or free hospital care, even after their insurance is billed, under a bill being debated this week.
Bill 1039 contains several key propositions:
- People earning up to 200% of the federal poverty level — this year it’s $55,500 for a family of four — would receive free hospital care.
- People in four-person households with annual incomes between $55,500 and $166,500, or 600% of the federal poverty level, would qualify for rebates.
- People in four-person households with annual incomes below $110,000, or 400% of the federal poverty level, would receive free hospital care after paying $2,300 in hospital bills in one year.
More than six in 10 North Carolina residents belonged to households with incomes below 400% of the federal poverty level in 2019, according to the Kaiser Family Foundation.
The bill, which State Treasurer Dale Folwell supports, includes sections that mirror model legislation in the National Consumer Law Center (NCLC) promotes. Folwell, a Republican, is a persistent critic of hospital billing policies. He challenged hospitals over the lack of price transparency and criticized tax-exempt hospitals for charging eligible patients for charity care.
In January, Folwell’s office reported that nonprofit hospitals reaped far more tax breaks than they gave in charitable care. The North Carolina Healthcare Associationwhich represents the hospitals, criticized the report, saying in a statement shortly after its release that “non-profit hospitals proudly fulfill their commitments of charitable care and community benefits to North Carolinians.”
Unpaid medical debts end up being red marks on credit reports, Folwell told members of the House Banking Committee this week. “The moral thing to do is to stop weaponizing people’s credit score based on a product they’d rather not consume,” he said.
A report by the Urban Institute shows that more than one in five people in North Carolina had overdue medical bills that were collected, based on December 2020 data. That’s a higher percentage than the national average. According to the report, black residents are more likely to have medical debt than white residents.
“It’s really exciting that North Carolina has introduced this bill,” NCLC attorney Jenifer Bosco said in an interview. “This could be so beneficial for low- to moderate-income North Carolina patients who are struggling with medical debt. Medical debt is such a pervasive problem.
An NCLC review of state financial aid policies released in November 2021 found that a dozen states had what it called “broad financial aid rules” for nonprofit hospitals. and for profit. Some state programs require free or reduced-cost care only for uninsured or underinsured patients who meet income guidelines. Only Illinois offers discounts for patients whose income reaches up to 600% of the federal poverty level and who are uninsured, according to the review.
Bosco said there is a correlation between less prevalent medical debt and strong hospital financial assistance policies. Medical debt is most prevalent in the Southeastern United States, where for the most part states have not expanded Medicaid to allow low-income adults to obtain health insurance.
The North Carolina State Employees Association and the NC Coalition Against Sexual Assault support the bill. While the state pays up to $800 for rape kits, assault victims may be charged for treatment for their injuries, said Skye David, a coalition lobbyist. Those bills are a burden on people who are uninsured or have insurance that doesn’t cover all costs, David said.
“I’ve looked at survivors’ bills, some are over $6,000,” David said. “If they don’t pay the bill, it impacts their credit score for years and years.”
The committee took no action on the bill, which enjoys bipartisan support. Committee Chairman Keith Kidwell (R-Beaufort) said the bill would return to committee after revisions. However, there probably isn’t much time left to get it adopted. The legislative session is expected to end around July 1reported the Associated Press.
In addition to applying discounts, the bill would prohibit reporting medical debt to credit agencies for one year after the first bill is issued. Hospital financial assistance policies should be widely publicized. Hospitals would also be required to verify patients’ eligibility for public or private insurance and other programs that can help pay hospital bills, and determine whether patients qualify for discounts or free care. .
Representative John Szoka, a Republican from Fayetteville and a member of the House Banking Committee, said the bill would require extensive work by hospitals to verify the financial status of patients. Some of the bill’s requirements are best handled by social service agencies, he said.
“I think Bill is trying to do a lot of things at once,” Szoka said. “I don’t want to see our hospitals become a complement to social services.”
The NC Healthcare Association doesn’t have a position on the bill, spokeswoman Cynthia Charles said in an email, but it does have a number of concerns about it.
“We are very concerned that this bill will push hospitals to absorb millions more dollars in unpaid care,” she wrote. “That, in turn, could increase the cost of care for others.”
Each of North Carolina’s hospitals and nonprofit health systems has financial assistance and charitable care policies that are printed on bills and published in other ways – on their websites, in brochures, and in conversations with patients, she wrote.
A 2013 state law sets rules for collecting medical bills, Charles wrote, and a federal law covers the behavior of debt collectors. “Additional advice does not seem necessary,” she said.
William Brewer, a consumer bankruptcy lawyer, said medical providers have become less aggressive over the years in collecting debts, but often those unpaid bills are part of a backlog of debt that drives people to file. the balance sheet. “For a lot of clients, it plays a more indirect role,” he said in an interview. Often, high medical bills mean people have been unable to work due to illness or were out of the workforce to care for a family member.
The bill would make a significant change by releasing married people from liability for spousal medical debts, he said in an email. Undivided debt is detrimental to couples who want to protect undivided real estate from creditors. The section of the bill that says married people would not be liable for each other’s medical debt “would be very beneficial in helping citizens protect their residences from medical creditors,” Brewer wrote.