Medical Debt in the US: Pervasive, Harmful, Unnecessary

June 17, 2022

Summary: A new survey on health care debt quantifies its very high prevalence (41%) and the dire consequences for individuals and families: financial insecurity, reduced access to health care, and being unable to “provide a good life”.

Health Care Debt In The U.S.: The Broad Consequences Of Medical And Dental Bills
KFF (Kaiser Family Foundation)
June 16, 2022
By Lunna Lopes et al

Executive Summary [HJM bolding]

… The KFF Health Care Debt Survey finds that four in ten adults have some form of health care debt. Yet the likelihood of having health care debt is not evenly distributed. Uninsured adults, women, Black and Hispanic adults, parents, and those with lower incomes are especially likely to say they have health care-related debt.

… Most adults with health care debt say the bills that led to their debt were from a one-time or short-term medical expense, which are often unexpected. Indeed, about half of adults … would be unable to pay a $500 unexpected medical bill without borrowing money. …

In their efforts to service or pay off their debt … many report serious consequences like skipping payment on other bills, delaying college or buying a home, or changing their housing situation as a result of their debt.

… These sacrifices have left some individuals feeling as if they could not provide a good life for their families, or with a general sense that they will never be able to extricate themselves from debt. Other reported … being contacted by debt collectors and having their credit scores negatively affected, can lead to additional financial problems such as difficulty buying vehicles needed for work or buying or renting a home.

Health care debt can also affect the ability of individuals to access needed medical or dental care. One in seven adults with health care debt say they have been denied care by a provider due to unpaid bills. In addition, adults with health care debt are more than twice as likely as those without debt to say they or someone they live with have postponed or skipped getting needed health care because of the cost.

[T]hose with lower incomes and people of color (particularly Black adults) are more likely to report being contacted by collection agencies due to health care debt, being denied subsequent care, and making difficult sacrifices like changing their housing situation to pay down their debt.

Comment by: Jim Kahn

Read this report! KFF did a thorough national survey, and wrote about it clearly and powerfully.

Medical debt statistics are frightening, even for someone like me so familiar with our insurance system’s flaws – how pervasive the problem is, and how severe the consequences for families. It undermines the American dream of economic security and the “pursuit of happiness” from our Declaration of Independence. As we approach Juneteenth, note that Black Americans are especially severely affected.

The situation is, of course, completely inexcusable. And completely remediable – Single payer.

To help you absorb the findings, here’s a summary of the figures. See especially Figs 9, 12, & 16 on consequences. (But read the report!)

Fig 1: 41% of US adults have medical debt
Fig 2: Most likely to have debt: Uninsured, Parents, Lower income, Black & Hispanic, Women
Fig 3: Medical debt is about half <$2500 and half >$2500
Fig 4: About half expect debt to last 3+ years, 25% forever among the poor
Fig 5: Debt is mostly due to short-term expenses.
Fig 6: From Diagnostic tests, Doctors, Emergencies, Dental, Hospital stays, Drugs, Ambulances.
Fig 7: Causes similar across age groups
Fig 8: Reasons: Thought insurance would pay, not enough money, possible bill inaccuracy
Fig 9: 63% reduced spending on household necessities, and 1/5 – 1/2 did each of these: used up savings, increased credit card debt, worked more, skipped other bills, delayed education or home purchase, took out a loan, sought charity aid, moved in with family or friends.
Fig 10: Lower income: all those percentages are higher.
Fig 11: 54% made “difficult sacrifices”.
Fig 12: 47% contacted by collection agencies, 35% lower credit score, 6% sued, 3% bankruptcy.
Fig 13: 66% of Blacks contacted by collection agencies.
Fig 14: 46% of Blacks lower credit score.
Fig 15: 15% denied care by medical provider due to debt.
Fig 16: 79% with debt skipped or delayed care or drugs due to cost (and 49% without).
Fig 17: Half would be unable to pay an unexpected $500 medical bill.
Fig 18: 68% support government limits on out-of-pocket costs.
Fig 19: 71% would like consumer assistance programs.