Under the plan, North Carolina hospitals will receive enhanced federal Medicaid reimbursement funds in return for clearing patients' medical debt -- dating back 10 years.
All qualifying hospitals have signed on.
Large medical debt is a constant weight on many people," Cooper said. "Judgments can ruin their credit score and keep them from getting loans, credit cards and even a job. It's also one of the main causes that drives people into bankruptcy."
Hospitals have also agreed to dial back using aggressive ways to collect debt.
Beginning next year, medical debt won't affect people's credit scores anymore.