Jennifer Mendoza
Research expert covering health, pharma and medtech
Medical debt in the U.S. - Statistics & Facts
Medical debt results from the high or unexpected health care expenses that an individual is unable to pay. Unlike other debts, medical debts are usually unplanned, two-thirds of medical debts are the result of a one-time or short-term medical expense arising from acute healthcare needs. An increasing number of Americans are finding unexpected healthcare costs unaffordable, while many are delaying required care due to costs. It is a significant and growing problem in the United States where public health insurance coverage is limited to certain groups of people, mainly through Medicare and Medicaid. In contrast, people in Western Europe and other developed countries like Japan and Australia benefit from some form of universal health coverage that protects them from unaffordable health care costs.
Health insurance in the United States
Since the repeal of the Affordable Care Act individual mandate, people living in the United States are no longer required to have health insurance. The number of people without health insurance in the U.S. has been around 30 million for a few years, leaving them susceptible to medical debt. The country has both public and private insurers, but data regarding U.S. health insurance by type of coverage shows that the majority of people have private health insurance through their employer. Nevertheless, just because an individual has health insurance through their employer does not necessarily make them impervious to medical debt.How many people have medical debt, and what do they owe?
Surprise medical bills or out-of-network billing are unexpected medical costs that can considerably increase a person's financial burden and lead to medical debt. The latest data suggests that nearly 100 million adults in the U.S. are saddled with medical debt, ranging from under 500 U.S. dollars to over 5,000 U.S. dollars. A different survey found that diagnostic tests, trips to doctors or specialists, and emergency room visits were the main sources of medical debt among U.S. adults. Adults with healthcare debt report making a variety of sacrifices and suffering significant financial consequences in their efforts to pay off their debt. Furthermore, unpaid medical bills exceeding 500 U.S. dollars can also have a negative impact on a person's credit rating if the debt is handed over to a collection agency by the credit provider.How to solve the problem of medical debt in the United States?
One way to solve the medical debt problem could be to enhance health insurance coverage for everyone through a single-payer healthcare system. Over the last few years, public support and opposition for a Medicare-for-all national health plan has remained fairly consistent. To protect Americans from receiving surprise medical bills from providers the federal government has introduced the No Surprises Act (NSA). Uninsured and self-pay patients are also protected under NSA from unforeseen expenses, as they now have the right to ask for a good faith estimate before receiving care. On an individual level, many people are unaware that they can negotiate with providers to lower their medical bills.
