There are plenty of reasons for states to expand Medicaid. It can increase access to health care, improve health outcomes and financial security, encourage employment and education gains, and the list goes on. A report released by the Urban Institute in June offers yet another reason: it is associated with decreased medical debt. The report used Urban Institute credit bureau data from August 2021 on more than 10 million consumers to assess medical debt in counties across the country and to study what county characteristics are associated with higher levels of medical debt. It found that 79 of the 100 counties with the highest levels of medical debt are in states that have not expanded Medicaid. The majority of these counties are in Texas (34 counties), Georgia (20 counties), and North Carolina (12 counties), three of the 12 remaining non-expansion states.

These non-expansion states, which have not expanded their Medicaid programs to include adults with incomes up to 138% of the Federal Poverty Line, have more residents who fall into the coverage gap, where they earn too much to be eligible for Medicaid, but too little to afford other forms of health insurance. According to the report, the share of the county population without health insurance is the second most important predictor of medical debt (the first is the percentage of the Medicare population with six or more chronic conditions, a proxy for the county’s overall health status). This is not the first report to show this relationship between Medicaid expansion and medical debt. My colleague Aubrianna Osorio blogged about an analysis from The Peterson Center on Healthcare and the Kaiser Family Foundation, published in March of this year, which found that adults in non-expansion states were 1.5x more likely to owe medical debt than those in expansion states.

It is not surprising that a lack of health insurance coverage is a strong predictor of medical debt. Without health insurance, individuals face higher medical bills that they may be unable to pay. If that county also has a high proportion of residents with chronic medical conditions, these individuals are likely going to use more health care, and as a result, face more medical bills. As individuals accrue medical debt, they are likely to forgo needed medical care, have difficulty meeting other basic needs, and face an increased risk of poor health outcomes and bankruptcy, as noted by the Urban Institute’s report.

Perhaps North Carolina is sick of medical debt (pun intended) and taking these lessons to heart. The state is getting close to bipartisan Medicaid expansion, which would provide eligibility to an estimated 500,000 uninsured nonelderly adults. Other non-expansion states, except South Dakota, which is set to vote on expansion in November, have made much less headway. In these states, residents will continue to face poorer health outcomes and higher debt burdens as their policymakers deny them access to quality, affordable health care.