Treasurer Folwell Supports “Medical Debt De-Weaponization Act”
Proposed Legislation is a Pro-Family, Anti-Poverty Consumer Protection Law
(Raleigh, N.C.) — State Treasurer Dale R. Folwell, CPA, expressed his support today for the Medical Debt De-Weaponization Act, the Medical Debt De-Weaponization Act, introduced by Rep. Ed Goodwin (R-Chowan), Rep. Howard Hunter (D-Hertford), Rep. Bobby Hanig (R-Currituck), and Rep. Billy Richardson (D-Cumberland). The legislation would create a pro-family, anti-poverty, consumer protection law that sets parameters around the provision of charity care and limits the ability of large medical facilities to charge unreasonable interest rates and employ unfair tactics in debt collection.
The new proposal is, in part, a legislative reaction to the October 2021 analysis by Johns Hopkins Bloomberg School of Public Health and the North Carolina State Health Plan (SHP). That report revealed that most North Carolina nonprofit hospitals are not fully honoring their charitable mission. The groundbreaking analysis found that fewer than 25 hospitals exceeded the value of their tax exemption with the amount of their charity care spending in North Carolina. It also suggests that North Carolina’s largest nonprofit hospital systems reaped tax breaks worth more than an estimated $1.8 billion in 2019-2020. Across the majority of these systems, charity care spending did not exceed 60% of the value of their tax breaks.
“I want to thank Representatives Goodwin and Hunter for their leadership in addressing this critical need,” Treasurer Folwell said. “With inflation at 40-year highs and North Carolinas suffering great anxiety, families need protection from the weaponization of medical debt. One of the ways you do that is to ensure that large medical providers are transparent concerning the availably of financial help and that appropriate levels of charity care are available to working families in need. A lifesaving procedure shouldn’t cost your life savings.”
The legislation is modeled off several other states’ laws seeking to protect families from the devastating impact of medical debt on Americans, with one in five being contacted by a debt collector over an unpaid medical bill. A recent study by Rice University Baker Institute of Public Policy, the National Academy for State Health Policy and the North Carolina State Health Plan found that in 2019 some of North Carolina’s nonprofit hospitals have billed $149.2 million to poor patients who should have qualified for free or discounted charity care under the hospitals’ own policies. Additionally, up to 28.7% of hospital bad debt was billed to impoverished patients likely eligible for charity care.
The new legislation would help working families avoid financial ruin just because they got sick. It requires that health care facilities develop a Medical Debt Mitigation Policy (MDMP) that would build on an existing framework of financial assistance plans under the federal Affordable Care Act. It would establish a set of steps that must be followed before someone is billed including:
“Former Treasurer Harlan Bowles warned us about the cost of health care 35 years ago,” said Treasurer Folwell. “Bill Gates warned us 16 years ago, State Employees Association of North Carolina and State Auditor Beth Wood 12 years ago, Warren Buffet four years ago and U.S. Sen. Elizabeth Warren three years ago when she said that health care billing is the leading cause of bankruptcy in the country. What all these individuals have in common is that they are all democrats. When average citizens can’t see themselves out of their poverty because of the health care cartel, it isn’t a political issue, it’s a moral one.”
The SHP, a division of the N.C. Department of State Treasurer, provides health care and pharmaceutical coverage to nearly 750,000 teachers, current and former lawmakers, state university and community college personnel, active and retired state employees and their dependents. For more information, visit the SHP website.