What We Owe: Medical Debt in America
Americans owe at least $220 billion in medical debt. That is a conservative estimate, based on survey data and deliberately excludes the highest outliers to avoid skewing the number upward. The real figure is almost certainly higher. Approximately 14 million people (6% of adults in the United States) owe more than $1,000 in medical debt. About 3 million people owe more than $10,000.
Most Americans with medical debt are employed and have health insurance. This is not a story about the uninsured falling through the cracks. This is a story about insurance that doesn’t actually protect you. High deductibles. Narrow networks. Surprise bills. A plan that covers 80% and leaves a family drowning in the other 20% of a catastrophic event.
As many as 23% of working-age adults who had consistent insurance coverage in 2024 were underinsured, leaving them unable to access affordable care despite technically having a plan. And they often don’t find out until the bill arrives.
Medical debt is the most common collection type on consumer credit reports. In an oft-cited study, as many as 66.5% of people who file for bankruptcy cite medical bills as a primary cause, an estimated 550,000 people per year. It follows people into loan applications, rental agreements, and job interviews. It can affect their ability to buy or rent a home, raise the price they pay for a car or insurance, and make it more difficult to find a job. An illness becomes a financial identity. For years.
Southern states have the highest rates of all. States with the highest share of adults with medical debt include South Dakota, Mississippi, North Carolina, West Virginia, and Georgia. Seven of the ten states never expanded Medicaid under the ACA are in the South.
70% of Americans with medical bills have had to cut food expenses to cope. About 50% of U.S. citizens believe they would go bankrupt if faced with a significant health issue. Half of us. Anticipating financial ruin. From getting sick.
In Western Europe and other developed countries like Japan and Australia, some form of universal health coverage protects people from unaffordable healthcare costs. Medical debt, as Americans experience it, is largely a U.S. phenomenon.
Medical debt is not a personal failure. It is a system failure. Dressed up as a personal one.
When the most indebted patients are insured, employed, and doing everything right, the problem is not individual behavior. The problem is a system that takes your premium every month and still sends you a bill that can unravel everything you’ve built.