Medical debt in America: 7 key takeaways

Medical debt has been a growing problem, and a new analysis from The Urban Institute and Robert Wood Johnson Foundation provides new insights on the issue. Here are some key takeaways.

More than one in four

Over a quarter of U.S. adults (27%) say they or a family member have medical debt. More than half (54%) of all Americans with medical debt owe at least $1,000, while 16% of those with debt owe $5,000 or more.

“A surprising and troubling finding was that was how much people owed,” says Michael Karpman, principal research associate at the Urban Institute.

More than 1 in 3 adults (35%) with medical debt say that collection agencies have contacted them about unpaid bills.

Many are insured

Those without insurance are more likely to have medical debt. Over a third of Americans (35%) without insurance have medical debt. But 26% of adults with insurance carry medical debt.

Seniors and debt

Nearly a fifth of all seniors age 65 and over are carrying debt tied to healthcare bills. Those in that age group have Medicare for health coverage, but some seniors still have debt.

Disparities and debt

Americans in minority groups are more likely to have medical debt. More than one in three Black adults (38%) and Hispanic adults (35%) reported holding medical debt, which reflects ongoing health and economic inequities.

“Unfortunately, these are very persistent disparities that we've seen across data sources in terms of the burden of medical debt by race and ethnicity,” Karpman says.

Disabilities and debt

Americans with disabilities are more likely to be in debt. 41% of those with disabilities have medical debt, compared to about 22% of Americans without disabilities.

“It's potentially a result of many different factors, which is both having greater healthcare needs and so therefore be more likely to incur large medical bills, and also having lower incomes because of less ability to work or lower-paying jobs in some cases,” Karpman says. “And so, not surprisingly, people with fewer resources and greater needs are more likely to have medical debt.”

Hospitals and debt

The majority of medical debts are tied to hospitals. Over half (52%) of Americans with medical debt owe money to hospitals.

Speaking to hospitals, Karpman says, “It's not surprising that that was a top source of medical debt, both because people may be going to the emergency room and having unexpected bills that they were not anticipating, and also because they're potentially subject to much larger bills by going to a hospital than going to to certain other providers.”

Health systems can work with patients to make sure they can access financial aid and support, and can simplify the application process, he says.

Expect more medical debt

With millions of Americans projected to lose Medicaid coverage in the next few years, analysts say it’s possible, and maybe likely, that more Americans will have medical debt. Analysts say hospitals should work with patients who are eligible for Medicaid to make sure they have coverage.