The Future of Medical Debt Relief in the United States

Abstract Over 100 million Americans carry an estimated $220 billion in medical debt, contributing to two-thirds of personal bankruptcies. Since 2022, state and local governments have responded by purchasing and canceling residents’ medical debt. In this scoping review, we examine and compare the structure and impact of these medical debt relief efforts. In sum, 10 states and 21 local governments have eliminated $13.5 billion in medical debt for 7 million residents to date. However, we found that these efforts have been primarily funded by temporary federal pandemic relief dollars that expire after 2026. North Carolina is a notable exception: by conditioning enhanced hospital Medicaid payments on the adoption of debt mitigation policies, the state has erased $6.5 billion in medical debt among its residents, representing 48% of all relief nationally, without utilizing federal pandemic funds or general state-fund appropriations. We argue that leveraging payment incentives may potentially offer a more durable approach to relieving existing debt, and that pairing retrospective debt relief with structural consumer protections is vital to target the upstream drivers of future debt burden. We also argue that sustaining progress requires evaluating program costs and the understudied health and financial outcomes of beneficiaries.