Research Update: Who Experiences Medical Debt?

Nearly 1 in 10 adults held significant medical debt in 2019, according to a new analysis from The Peterson Center on Healthcare and the Kaiser Family Foundation (KFF). Using data from the Census Bureau’s Survey of Income and Program Participation (SIPP), researchers found that about 23 million people owed at least $250 in unpaid medical bills, with 16 million owing at least $1,000.  Three million people owed more than $10,000 in medical debt.

Medical debt can and does affect people in every demographic group, but the researchers find that Black adults, those without health insurance, lower-income adults, those in poorer health and with disabilities and those living in Medicaid non-expansion states are more likely to have unpaid medical bills:

  • Overall, 9 percent of adults experienced significant medical debt as of December 2019.
  • While almost 1 in 6 Black adults (16%) held medical debt, only 4 percent of Asian adults did. Latino (9%) adults and adults who identified as another race (10%) experienced medical debt at about the same rate as adults overall.
  • Thirteen percent of adults who were uninsured for at least 6 months during the year held medical debt.
  • Twelve percent of adults earning less than 400 percent of the federal poverty level held medical debt, compared to just 4 percent of those earning at least 600 percent of the federal poverty level.
  • More than 1 in 5 adults reporting poor health (21%), and another 17 percent reporting fair health owed medical debt, along with 15 percent of adults with a disability.
  • At the intersection of income and health status, nearly 1 in 4 adults (23%) earning less than 400 percent of poverty who were also in “poor” health owed medical debt.
  • Adults in Medicaid non-expansion states were 1.5 times more likely to owe medical debt than those in expansion states (12% vs. 8%). Adults in the South (12%) and in rural/non-metro areas (13%) were also more likely to owe debt.
  • By a conservative estimate, the US owes at least $195 billion in total unpaid medical bills. Less than 1 percent of the population (about 3 million) — those who owe more than $10,000 — owed almost three-quarters of the total medical debt.

As the researchers note, medical debt can spill over into other areas of household finances and lead people to cut back on essentials like food, spend down savings, or borrow additional funds. And although health insurance helps protect families financially, cost-sharing provisions like premiums, deductibles, and co-pays can make care unaffordable.

Medicaid, however, typically has no (or very low) cost-sharing. As Medicaid enrollment has grown during the COVID-related public health emergency, especially because of Medicaid’s current continuous coverage protection, many more Americans were likely protected from accumulating significant medical debt. As states prepare to restart eligibility determinations when the public health emergency ends, it will be critical to ensure that people who are still eligible can retain this coverage and not lose their coverage inappropriately.  That will substantially reduce the risk of facing unpaid medical bills for many low-income individuals and families.

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