100 Million Americans in Medical Debt

The Kaiser Family Foundation has researched the growth in medical debt. To calculate the true extent and burden of this debt, the Kaiser Health Network-NPR investigation draws on a nationwide poll conducted by KFF for this project. The poll was designed to capture not just bills patients couldn’t afford, but other borrowing used to pay for health care as well. New analyses of credit bureau, hospital billing, and credit card data by the Urban Institute and other research partners also inform the project. Their headline conclusion is that 100 million Americans are in debt for medical care.

In the past five years, more than half of U.S. adults report they’ve gone into debt because of medical or dental bills, the KFF poll found.

A quarter of adults with health care debt owe more than $5,000. And about 1 in 5 with any amount of debt said they don’t expect to ever pay it off.

Share of Indebted Adults who have done the following:

Cut spending on food, clothing, and other basics 63%

Used up all or most savings 48%

Taken on extra work 40%

Delayed buying a home or delayed education 28%

Sought aid from charity or nonprofit 24%

Changed living situation 19%

Declared bankruptcy or lost home 17%

Medical debt is piling additional hardships on people with cancer and other chronic illnesses. Debt levels in U.S. counties with the highest rates of disease can be three or four times what they are in the healthiest counties, according to an Urban Institute analysis.

Debt from health care is nearly twice as common for adults under 30 as for those 65 and older, the KFF poll found.

About 1 in 7 people with debt said they’ve been denied access to a hospital, doctor, or other provider because of unpaid bills, according to the poll. An even greater share ― about two-thirds ― have put off care they or a family member need because of cost.

Patient debt is piling up despite the landmark 2010 Affordable Care Act. The law expanded insurance coverage to tens of millions of Americans. Yet it also ushered in years of robust profits for the medical industry, which has steadily raised prices over the past decade.

Hospitals recorded their most profitable year on record in 2019, notching an aggregate profit margin of 7.6%, according to the federal Medicare Payment Advisory Committee. Many hospitals thrived even through the pandemic.

Now, a highly lucrative industry is capitalizing on patients’ inability to pay. Hospitals and other medical providers are pushing millions into credit cards and other loans. These stick patients with high interest rates while generating profits for the lenders that top 29%, according to research firm IBISWorld.

Patient debt is also sustaining a shadowy collections business fed by hospitals ― including public university systems and nonprofits granted tax breaks to serve their communities ― that sell debt in private deals to collections companies that, in turn, pursue patients.

Even those with insurance incur debt due to increasing cost sharing. PayMedix, a firm that extends credit to consumers polled more than 1,000 such plan members, as well as 210 HR benefits managers, to gauge the effects employer health plans and skyrocketing medical costs were having on insured consumers.

The survey found that out-of-pocket costs, coupled with high deductibles, were particular sources of concern. Survey highlights include:

• Out-of-pocket costs: 33% said they were unable to afford them.
• Deductibles: 31% said they were unaffordable. Additionally, 44% of those with a credit score of 669 or less found deductibles unaffordable.
• More than half said the situation had been exacerbated in the last six months when paying for medical bills came due.
• Collection notices are mounting: Nearly 1 in 5 Americans have received collection notices from their medical providers, with a third of millennials (34%) and a quarter of Gen Z (27%) getting sent to collections.
• Less than 1 in 5 report that their employers provide a payment solution that offers credit, or a solution that simplifies the billing experience.
• Half of those surveyed, and nearly two-thirds of Gen Z (64%) and Millennials (65%), believe employers should be responsible for a solution to the dilemma.