State Treasurer Dale R. Folwell, CPA, spoke out to protect patients from crushing medical debt during a public hearing on the Medical Debt De-Weaponization Act in Charlotte on March 16.
Treasurer Folwell was joined by Mecklenburg County Commissioner Pat Cotham, Pastor Dr. Ricky A. Woods, former mayor of Huntersville John Anarella and other community leaders. They discussed the failures in patient protections that have exposed thousands of patients to lawsuits or high interest rates on medical debt around Charlotte.
Medical debt is crippling families’ upward mobility and creating generational poverty in Charlotte. Atrium Health has sued more than 1,000 patients over medical debt, including during the pandemic —and encouraged tens of thousands more to open “medical credit cards” that can charge up to 18% interest on medical debt. Atrium Health paid its top 10 executives $27 million in 2020, equal to a full tenth of its charity care spending on impoverished patients.
“We want the hospital cartel to offer a level of charity care equal to the billions in tax breaks they get from this community and this state,” Treasurer Folwell said. “We also want them to stop weaponizing people’s credit scores, breaking their kneecaps, and permanently and possibly generationally stunting their joy of achievement and upward mobility.”
About one in five families are in medical debt collections in the counties surrounding Charlotte, and that number rises to one in four for communities of color in Mecklenburg County. The average worker loses 20% of a paycheck to health care costs. Nearly 40% of Americans reported cutting back on food, utilities or gas to pay health care bills. Health care costs drove almost half of adults to report delaying or skipping necessary medical care.
The bi-partisan Medical Debt De-Weaponization Act (H367) was introduced in the N.C. House of Representatives this week with Rep. Ed Goodwin (Chowan), Rep. Tricia Ann Cotham (Mecklenburg), Rep. Charles Miller (Brunswick) and Rep. Garland Pierce (Scotland) as primary sponsors with an additional 20 members of the House currently joining as co-sponsors.
A parallel bill (S321) was introduced in the N.C. Senate sponsored by Health and Pension Committee Chairs Sen. Joyce Krawiec (Forsyth) and Sen Jim Burgin (Harnett) as well as Sen Carl Ford (Rowan).
These bills help working families avoid financial ruin just because they got sick. They strengthen patients’ access to charity care, limit unfair tactics in debt collection, and restrict the ability of large medical facilities to charge unreasonable interest rates on medical debt.
North Carolina’s largest nonprofit hospital systems enjoyed more than $1.8 billion in tax breaks in 2020, but only WakeMed Health justified its tax exemption with charity care spending. Some hospitals instead billed $149 million to poor patients.
“We have a medical system in this country that is broken. I don’t think there’s anybody in this room that can argue that point,” said Pastor Dr. Ricky Woods. “We have wonderful medical providers and great hospitals, but affordability is an issue. The leading cause of bankruptcy in the country continues to be medical debt. And for the home of the brave and the land of the free, something has to change concerning that.”
Pastor Dr. Woods added that we need to come up with policy changes to ensure the “fair and equitable delivery of medical services throughout out the country.” Additionally, he called for better tracking of community benefits to determine how much is actually going to patients that the hospitals have a “legal obligation to serve.“
“I’m so grateful that our treasurer brought us all together here. I certainly know of medical debt. There hasn’t been a bright light put on it and I think this is the beginning of that and that’s the beginning of a solution,” said Mecklenburg County Commissioner Pat Cotham. “Medical debt can be complicated, and it can be unjust, but it can also be deadly. It can affect people not getting the care they need. They’re afraid to go to the doctor.”
North Carolina currently ranks in the bottom half of states for its failure to guard patients’ financial health. Worse, North Carolina is one of the most unaffordable and monopolistic states for health care, and the Medical Debt De-Weaponization Act would make North Carolina second in the nation for consumer protections against medical debt. It would help the state hold hospitals accountable for their charity care and billing practices.
“I think when you consider the typical hospital visit, which is typically an emergency or something unplanned … it’s always something where your life is getting turned upside down,” said former mayor of Huntersville John Anarella. “And when you consider that from that life-changing situation you’re also going to have some extensive medical bills, I think it’s reasonable for a hospital, whether it be a profit or non-profit, especially a non-profit, to be a little more flexible in caring when dealing with a patient’s bills. And certainly with the collections. And should we require higher standards for non-profits?”
The State Health Plan, a division of the Department of State Treasurer, provides health care coverage to more than 750,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel, and their dependents.
The Charlotte Medical Debt De-Weaponization forum can be watched on the Department of State Treasurer’s Facebook page.