BY THE OPTIMIST DAILY EDITORIAL TEAM
When Dawn Daly-Mack checked her mailbox one ordinary day, she nearly tossed an envelope she assumed was junk. Instead, she thought twice and opened it, finding a message that was far from mundane.
“I opened it up and it said, ‘Your medical bill has been paid,’” says Daly-Mack, 60, who lives in Gaston, North Carolina. “I didn’t believe it.”
The letter was real. Her $459 medical bill, dating back to a 2014 emergency room visit for a sinus infection, had been erased. Daly-Mack is one of roughly 2.5 million North Carolinians whose medical debt vanished under a sweeping new agreement between the state and its hospitals.
At the time of that hospital visit, Daly-Mack was supporting her family as the sole breadwinner while caring for her disabled husband and two teenagers. “I was not able to pay the bill,” she says. Adding to the irony, she was working as a nurse at the very same hospital that was attempting to collect the debt.
Clearing the past and fixing the system
North Carolina’s approach went far beyond wiping out old balances. All 99 hospitals in the state agreed to stop collecting certain medical debts going back to 2014. Just as importantly, they committed to preventing future debt by automatically discounting care for patients who qualify for financial assistance, without forcing them to apply.
For a family of four, that threshold now includes households earning under $96,000 a year.
“I’m excited for the people of North Carolina,” says Allison Sesso, CEO of Undue Medical Debt, the nonprofit that worked with hospitals to identify eligible patients. “It pairs not just medical debt relief going backwards, but it fixes the upstream problems.”
Hospitals collaborated with Sesso’s team to locate qualifying accounts and notify patients directly, turning years of financial stress into unexpected relief.
A personal mission behind the policy
For Kody Kinsley, North Carolina’s former secretary of health, medical debt was never an abstract policy issue.
“My second year of college, my father had a massive stroke,” Kinsley recalls. His family lacked health insurance, and the fear was immediate. “A key thought in her mind was, ‘We don’t have health insurance. Oh my God. We’re gonna end up in debt.’”
Kinsley was eventually able to secure a hospital discount, but as health secretary years later, he heard similar stories again and again. Even after Medicaid expansion in 2023 brought coverage to 675,000 more residents, many people remained weighed down by older medical bills.
“They had a forward path, but they were still wrestling with that backward,” he says.
That insight shaped the state’s strategy. North Carolina tied additional Medicaid funding for hospitals to forgiving medical debt dating back to 2014, the earliest year the state could have expanded Medicaid. Hospitals also agreed to remove paperwork hurdles by automatically applying financial assistance.
“People can walk in the front door of a hospital in an emergency situation and not feel like they’re taking both their health and their financial well-being at risk in that moment,” Kinsley says.
A national patchwork of solutions
North Carolina’s effort stands out, but it is not happening in isolation. Across the country, states are experimenting with ways to overcome a medical debt crisis estimated at $220 billion, affecting roughly one in 12 Americans.
Arizona and New Jersey have used public funds to buy and forgive medical debt. Oregon and Illinois now screen patients for financial assistance earlier. Colorado and New York have banned medical debt from credit reports, though similar federal protections were recently rolled back.
Heather Howard, director of Princeton University’s State Health and Value Strategies program, welcomes the momentum but is concerned about inconsistency.
“Your ZIP code is going to determine the protections you have,” Howard says.
She argues that lasting progress will require federal action, especially as proposed health care changes could leave millions more uninsured. “We shouldn’t be talking about a static problem,” Howard adds. “This problem is going to grow.”
What comes next
Hospitals are watching closely. With potential Medicaid cuts on the horizon and more people at risk of losing coverage, unpaid care could rise again. The North Carolina Healthcare Association has warned that such pressures may make “sustaining these efforts more challenging.”
Still, for millions of residents like Daly-Mack, the change has already landed with real impact. North Carolina’s approach offers a rare example of policy that looks backward with compassion and forward with prevention, proving that medical debt is not an inevitable part of getting sick.
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