Despite widespread concern, there is only limited evidence on recent trends in medical debt, its distribution across individuals and how health policy has affected the distribution of medical debt.
The amount of U.S. medical debt is high, and it is greatest among people who live in the South and in ZIP codes with the lowest incomes.
This is the takeaway message from a JAMA original investigation based on consumer credit reports. Because of rising health care prices, increased cost-sharing and the fact that more than 26 million people are uninsured, the U.S. health care system leaves many consumers with high out-of-pocket costs. If these medical bills are not paid, the outstanding amount is classified as medical debt.
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Nearly 18% of individuals carried medical debt as of June 2020. Personal debt, broadly defined, is associated with worse mental health and a deterioration of personal finances. Despite widespread concern, there is only limited evidence on recent trends in medical debt, its distribution across individuals and how health policy has affected the distribution of medical debt.
Among the key findings of the study:
- Medicaid expansion under the Affordable Care Act was associated with reduced medical debt overall and with reduced gaps in the amount of medical debt between low- and high-income communities.
- During the last decade, medical debt has become the largest source of debt in collections. The reductions in nonmedical debt in collections between 2009 and 2020 occurred simultaneously with the economic recovery from the recession, consistent with the well-documented association between unemployment and loan delinquency.
- By contrast, total medical debt in collections decreased by a more modest amount. As a result, as of June 2020, individuals had $39 more in mean medical debt in collections than they had in mean debt in collections from all other sources combined ($429 vs. $390), including credit cards, utilities and phone bills.
- Researchers estimate that total medical debt in the United States is $140 billion.
- Many states with the highest pre-ACA levels of medical debt did not expand Medicaid and subsequently did not experience substantial reductions in medical debt. Specifically, eight of the 12 states that did not expand Medicaid are in the South, the region with the highest pre-ACA levels of medical debt.
"This study provides an estimate of the amount of medical debt in collections in the United States based on consumer credit reports from January 2009 to June 2020, reflecting care delivered prior to the COVID-19 pandemic, and suggests that the amount of medical debt was highest among individuals living in the South and in lower-income communities," the report concluded. "However, further study is needed regarding debt related to COVID-19.
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
