North Carolina Governor Says $6.5 Billion in Medical Debt is “Erased”

Governor Josh Stein recently announced that more than $6.5 billion in medical debt has been “erased” for over 2.5 million North Carolinians through the state’s Medical Debt Relief Program. The milestone marks a significant expansion of a first-in-the-nation effort launched in 2024 under the leadership of former Governor Roy Cooper.

“Medical debt is a tremendous weight keeping so many families from financial security, and unlike most other forms of debt, it’s not a choice,” said Governor Stein. “Today’s announcement will free people from financial stress so they can focus on getting healthy.”

The Medical Debt Relief Program was created through a collaboration between the North Carolina Department of Health and Human Services, 99 acute-care hospitals, and the national nonprofit Undue Medical Debt. The program enables hospitals to receive enhanced federal Medicaid reimbursements if they forgive existing medical debt, cease reporting it to credit agencies, and expand their charity care policies to prevent future debt.

Dr. Dev Sangvai, Secretary of Health and Human Services, said the effort is both financial and humanitarian. “Easing debt is a pivotal step forward to improving the health and well-being of those who carry the emotional stress and financial weight of high medical costs,” he said.

More than 255,000 letters have been mailed to North Carolinians to notify them that their debt has been erased. Undue Medical Debt CEO Allison Sesso said the program is setting a national precedent: “We’re thrilled that all 99 hospitals have signed on. These changes protect patients from burdensome medical debts while keeping hospitals financially strong.”

The relief total surpasses early estimates of $4 billion and now covers nearly one in four residents. On average, about $2,600 in debt per person is being canceled.

“This is life-changing news for so many families,” Stein said. “No one chooses to have a heart attack or get diagnosed with a chronic condition — you just have to deal with it. This program gives people a second chance to get healthy and get ahead.”

Medical debt has long been a major issue in North Carolina. A 2024 report found that roughly 3 million adults carried some form of medical debt, among the highest rates in the nation. The American Cancer Society Cancer Action Network praised the state’s new milestone as “a monumental day for North Carolina.”

Hospitals are continuing to work with Undue Medical Debt to complete the next phase of implementation over the coming year. Residents do not need to apply to receive relief, and information about the program — including examples of the official debt forgiveness letters — is available on the North Carolina Department of Health and Human Services website.

Governor Stein said North Carolina intends to continue leading the way on medical debt reform. “People don’t choose to get sick,” he said. “We’re choosing to give them a fair chance to get well.”