During her acceptance speech Thursday night, Democratic presidential nominee Kamala Harris addressed the exorbitant cost of health care in the United States.
“As president, I will bring together labor and workers and small-business owners and entrepreneurs and American companies to create jobs, to grow our economy and to lower the cost of everyday needs like health care and housing and groceries,” Harris said at the 2024 Democratic National Convention in Chicago.
One of the foremost issues Americans think about when it comes to health care costs is medical debt, which Harris has vowed to eliminate for millions of Americans.
Nearly 1 in 12 adults in the U.S. have medical debt, according to a recent poll from KFF, a nonprofit group that researches health policy issues. Nearly 3 in 4 adults say they’re worried about paying for an unexpected medical bill.
Harris hasn’t yet released many details about her strategy to wipe out medical debt, but policy experts say a newly implemented medical debt relief program from North Carolina could offer a road map.
Earlier this month, North Carolina Gov. Roy Cooper announced that nearly 100 hospitals in the state had signed on to participate in the Medical Debt Relief Incentive Program, which he said will incentivize hospitals to eliminate $4 billion in medical debt for 2 million low- and middle-income patients over the next two years.
Starting next year, Cooper said, the program will also take steps to prevent the accumulation of new debt in part by curbing aggressive debt collection practices by hospitals, such as adding on high interest rates or fees to unpaid bills, or selling the debt to third-party collection agencies.
Hospitals will have until July 1, 2025, to forgive past debts; however, some have already done so.
Vice President Harris closely coordinated with Cooper on the plan and participated in the announcement, according to Neale Mahoney, a professor of economics at Stanford University who served on the White House National Economic Council in 2022 and 2023. At a campaign event last week in Raleigh, North Carolina, Harris thanked Cooper for canceling medical debt in his state, and Cooper introduced Harris at the convention Thursday.
“I suspect she sees this as a model for what other states could do,” Mahoney said. “North Carolina is not a deep blue state, so it’s possible other states could get on board.”
‘Anyone can find themselves vulnerable’
Experts say medical debt is different from other types of debt, which usually stem from a person intentionally borrowing more money than they can repay.
With medical debt, “it’s unpredictable, you don’t know when you’re going to get sick,” said Dr. Adam Gaffney, a critical care physician at the Cambridge Health Alliance in Massachusetts. “You could step into an emergency room expecting to get a quick checkup and then wind up hospitalized.”
Medical debt can often leave families in financial ruin: The average deductible — the amount someone has to pay out of pocket before coverage kicks in — for employer-based health insurance was more than $1,700 per person in 2023, said Larry Levitt, executive vice president for health policy at KFF.
People often have to borrow money from family members, Levitt said, or put their hospital bills on credit cards, which can lead to credit card debt.
“Almost anyone could find themselves vulnerable to medical debt,” said Levitt, who described the North Carolina plan as a “creative approach.”
“Many, many people don’t have that kind of money lying around if they’re hit with a bill that size,” he said.
As vice president, Harris has already made medical debt a central issue, pledging to get unpaid bills removed from credit reports — a move praised by experts who say credit reporting unjustly punishes people for getting sick. A low credit score can lead to difficulties getting a loan for a mortgage or approval for renting an apartment.
In June, the Consumer Financial Protection Bureau proposed a rule that would reduce the number of people with medical debt listed on their credit reports to zero. A CFPB representative said the earliest the rule would take effect would be next year, although that could change depending on the outcome of the election.
Mahoney and other experts said Harris has hinted that the North Carolina plan is something she could implement nationwide if elected to the White House in November.
In an economic policy proposal shared by Harris’ campaign last week, she stated that as president she would “work with states” to cancel medical debt for millions of Americans and to “help prevent such debt from accumulating in the future” — a key tentpole of the North Carolina plan.
“I think that statement was encouraging because it did talk about both wiping out debt and stopping the accumulation of debt,” Mahoney said.
“The North Carolina approach could be a blueprint for other states,” Levitt said.
Will states adopt it?
According to a release shared by the North Carolina Department of Health and Human Services, participating hospitals will forgive all unpaid medical debt dating back to Jan. 1, 2014, for individuals who are enrolled in Medicaid.
They will also forgive all medical debt for people who aren’t on Medicaid but have incomes at or below 350% of the federal poverty level — about $90,370 for a family of three — or if their total debt is more than 5% of their yearly income.
The policy will automatically enroll eligible individuals into financial assistance programs, also known as charity care, offer discounts on medical bills based on income, prevent the sale of medical debt to collectors for those below 300% of the federal poverty level — $77,460 for a family of three — and ensure that covered debts aren’t reported to credit agencies.
Ciara Zachary, an assistant professor in the department of health policy and management at UNC Gillings School of Global Public Health in North Carolina, said this is possible thanks to a federal program — the Healthcare Access and Stabilization Program — which provides higher reimbursement rates to hospitals that serve large numbers of Medicaid and uninsured patients.
Hospitals will get additional federal funds if they forgive existing debt and move to prevent future medical debt.
The Centers for Medicare and Medicaid Services signed off on the plan.
Zachary said it’s something Harris could roll out nationally.
“It could be like an expansion, where states can adopt it, or there could be some kind of big, sweeping legislation,” she said. “I think maybe a Harris administration could also just continue to incentivize and promote these efforts.”
Still, she said, some Republican-led states might decline to adopt it simply because it was introduced by Democratic leaders — something that happened when the Affordable Care Act, also known as Obamacare, was signed into law by former President Barack Obama in 2010.
“There are going to be states that are going be like, ‘This is great, we want to be progressive,’” Zachary said. “And then there might be a couple more traditionally or historically red states that might not be early adopters but recognize that they have hospitals at risk of closing.”
Mahoney said there is still more Harris can do.
“I see medical debt as the most salient example of a health care system which isn’t working,” he said. “For people who are sick, the price of health care can be crushingly high. You can show up in the ER and end up with a $30,000 bill.”
