A MARTÍNEZ, HOST:
Millions of people in North Carolina are newly free of their medical debt. A state program wiped out $6.5 billion worth of debt last year, and it didn't cost the state a dollar. Alex Olgin has the story.
ALEX OLGIN: On a routine trip to the mailbox this October, Dawn Daly-Mack almost threw away an important letter.
DAWN DALY-MACK: I saw this, and I'm, like, oh, this looks like it's either a bill or some junk. I opened it up and it said, your medical bill has been paid. And I'm, like, right (laughter). You know, I didn't believe it.
OLGIN: But it was real. Sixty-year-old Daly-Mack is one of 2 1/2 million North Carolinians who got this letter from Undue Medical Debt. The hospital wiped away her $459 bill for a 2014 emergency room visit for a sinus infection.
DALY-MACK: I was the only breadwinner in the family, and so I was not able to pay the bill.
OLGIN: At the time, Dawn was caring for her disabled husband and two teenagers. She was working as a nurse at the very same hospital trying to collect from her.
DALY-MACK: When a bill you know there's no way you're going to pay it, it becomes a non-bill to you. And you just kind of set it aside and, you know, deal with the things that seem to be important in your life, and that's what happened with this.
OLGIN: The state got all 99 hospitals to get rid of old debt dating back a decade. And going forward, they agreed to prevent people in Mack's income range from accumulating debt in the first place. North Carolina hospitals now automatically give discounts if patients who are in a family of four make less than $96,000 a year.
ALLISON SESSO: I'm excited for the people of North Carolina because of just the unique and amazing approach that they're taking and how impactful we think that's going to be.
OLGIN: That's Allison Sesso, CEO of Undue Medical Debt. Typically, the organization buys up medical debt for pennies on the dollar and erases it. In North Carolina, they did something different. The charity worked with hospitals to figure out whose debt to eliminate. Then Sesso's team sent them letters saying it was erased. Former Secretary of Health Kody Kinsley organized this. He enticed hospitals to cooperate by tying extra Medicaid dollars to participating. For him, the issue is personal.
KODY KINSLEY: My second year of college, my father had a massive stroke.
OLGIN: Kinsley's mom was really worried about how to pay for his care.
KINSLEY: A lot of the anxiety that she was navigating while also trying to care for my father was, we don't have health insurance. Oh, my God, we're going to end up in debt.
OLGIN: Luckily, Kinsley got a discount from the hospital. He says it shouldn't be up to the patient's family to ask. That's why, as secretary of health, he shifted the responsibility. Now, hospitals must figure out who should get cheaper care.
KINSLEY: This was also really important for me to try to change this relationship so that people can walk in the front door of a hospital in an emergent situation and not feel like they're taking both their health and their financial well-being at risk in that moment.
OLGIN: Other states are taking action. Arizona and New Jersey used state dollars to buy and forgive medical debt. Oregon and Illinois screen patients for financial assistance. Colorado and New York ban debt from credit reports. The federal government recently rolled back that same protection. Heather Howard at Princeton University directs the State Health and Value Strategies program. She's encouraged to see all these states tackle this $220 billion problem, but help is uneven.
HEATHER HOWARD: Your ZIP code is going to determine the protections you have.
OLGIN: She thinks federal rules are necessary, especially as President Trump's health care policies are expected to lead to 14 million more people without insurance.
HOWARD: And we shouldn't be talking about, like, a static problem. This - the problem is going to grow.
OLGIN: The looming Medicaid cuts and more people without health insurance mean hospitals are bracing for more unpaid care. The North Carolina Healthcare Association, which represents hospitals, say those cuts could make sustaining these efforts more challenging.
For NPR News, I'm Alex Olgin.
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