100 Million People in America Are Saddled With Health Care Debt

Elizabeth Woodruff drained her retirement account and took on three jobs after she and her husband had been sued for almost $10,000 by the New York hospital the place his contaminated leg was amputated.

Ariane Buck, a younger father in Arizona who sells medical health insurance, couldn’t make an appointment along with his physician for a harmful intestinal an infection as a result of the workplace stated he had excellent payments.

Allyson Ward and her husband loaded up bank cards, borrowed from family members, and delayed repaying pupil loans after the untimely beginning of their twins left them with $80,000 in debt. Ward, a nurse practitioner, took on additional nursing shifts, working days and nights.

“I needed to be a mother,” she stated. “However we needed to have the cash.”

The three are amongst greater than 100 million folks in America ― together with 41% of adults ― beset by a well being care system that’s systematically pushing sufferers into debt on a mass scale, an investigation by KHN and NPR exhibits.

The investigation reveals an issue that, regardless of new consideration from the White Home and Congress, is much extra pervasive than beforehand reported. That’s as a result of a lot of the debt that sufferers accrue is hidden as bank card balances, loans from household, or fee plans to hospitals and different medical suppliers.

To calculate the true extent and burden of this debt, the KHN-NPR investigation attracts on a nationwide poll conducted by KFF for this mission. The ballot was designed to seize not simply payments sufferers couldn’t afford, however different borrowing used to pay for well being care as properly. New analyses of credit score bureau, hospital billing, and bank card information by the City Institute and different analysis companions additionally inform the mission. And KHN and NPR reporters performed lots of of interviews with sufferers, physicians, well being trade leaders, client advocates, and researchers.

The image is bleak.

Prior to now 5 years, greater than half of U.S. adults report they’ve gone into debt due to medical or dental payments, the KFF ballot discovered.

1 / 4 of adults with well being care debt owe greater than $5,000. And about 1 in 5 with any quantity of debt stated they don’t anticipate to ever pay it off.

“Debt is not only a bug in our system. It is among the foremost merchandise,” stated Dr. Rishi Manchanda, who has labored with low-income sufferers in California for greater than a decade and served on the board of the nonprofit RIP Medical Debt. “We now have a well being care system virtually completely designed to create debt.”

The burden is forcing households to chop spending on meals and different necessities. Tens of millions are being pushed from their properties or out of business, the ballot discovered.


Medical debt is piling further hardships on folks with most cancers and different power diseases. Debt ranges in U.S. counties with the very best charges of illness could be three or 4 instances what they’re within the healthiest counties, in keeping with an Urban Institute analysis.

The debt can be deepening racial disparities.

And it’s stopping People from saving for retirement, investing of their kids’s educations, or laying the normal constructing blocks for a safe future, similar to borrowing for faculty or shopping for a house. Debt from well being care is almost twice as frequent for adults underneath 30 as for these 65 and older, the KFF ballot discovered.

Maybe most perversely, medical debt is obstructing sufferers from care.

About 1 in 7 folks with debt stated they’ve been denied entry to a hospital, physician, or different supplier due to unpaid payments, in keeping with the ballot. An excellent better share ― about two-thirds ― have delay care they or a member of the family want due to value.

“It’s barbaric,” stated Dr. Miriam Atkins, a Georgia oncologist who, like many physicians, stated she’s had sufferers quit remedy for concern of debt.

Affected person debt is piling up regardless of the landmark 2010 Inexpensive Care Act.

The legislation expanded insurance coverage protection to tens of tens of millions of People. But it additionally ushered in years of strong earnings for the medical trade, which has steadily raised costs over the previous decade.

Hospitals recorded their most worthwhile yr on file in 2019, notching an mixture revenue margin of seven.6%, in keeping with the federal Medicare Payment Advisory Committee. Many hospitals thrived even via the pandemic.

However for a lot of People, the legislation didn’t reside as much as its promise of extra inexpensive care. As a substitute, they’ve confronted hundreds of {dollars} in payments as well being insurers shifted prices onto sufferers via larger deductibles.

Now, a extremely profitable trade is capitalizing on sufferers’ incapacity to pay. Hospitals and different medical suppliers are pushing tens of millions into bank cards and different loans. These stick sufferers with excessive rates of interest whereas producing earnings for the lenders that prime 29%, in keeping with research firm IBISWorld.

Affected person debt can be sustaining a shadowy collections enterprise fed by hospitals ― together with public college programs and nonprofits granted tax breaks to serve their communities ― that promote debt in non-public offers to collections corporations that, in flip, pursue sufferers.

“Persons are getting harassed in any respect hours of the day. Many come to us with no thought the place the debt got here from,” stated Eric Zell, a supervising lawyer on the Authorized Assist Society of Cleveland. “It appears to be an epidemic.”

In Debt to Hospitals, Credit score Playing cards, and Family

America’s debt disaster is pushed by a easy actuality: Half of U.S. adults don’t have the money to cowl an surprising $500 well being care invoice, in keeping with the KFF ballot.

Consequently, many merely don’t pay. The flood of unpaid payments has made medical debt the most typical type of debt on client credit score data. 

As of final yr, 58% of money owed recorded in collections had been for a medical invoice, according to the Consumer Financial Protection Bureau. That’s almost 4 instances as many money owed attributable to telecom payments, the subsequent commonest type of debt on credit score data.

However the medical debt on credit score reviews represents solely a fraction of the cash that People owe for well being care, the KHN-NPR investigation exhibits.

  • About 50 million adults ― roughly 1 in 5 ― are paying off payments for their very own care or a member of the family’s via an installment plan with a hospital or different supplier, the KFF ballot discovered. Such debt preparations don’t seem on credit score reviews except a affected person stops paying.
  • One in 10 owe cash to a good friend or member of the family who lined their medical or dental payments, one other type of borrowing not usually measured.
  • Nonetheless extra debt finally ends up on bank cards, as sufferers cost their payments and run up balances, piling excessive rates of interest on prime of what they owe for care. About 1 in 6 adults are paying off a medical or dental invoice they placed on a card.

How a lot medical debt People have in whole is difficult to know as a result of a lot isn’t recorded. However an earlier KFF analysis of federal data estimated that collective medical debt totaled a minimum of $195 billion in 2019, bigger than the economic system of Greece.


The bank card balances, which additionally aren’t recorded as medical debt, could be substantial, in keeping with an analysis of credit card records by the JPMorgan Chase Institute. The monetary analysis group discovered that the standard cardholder’s month-to-month steadiness jumped 34% after a serious medical expense.

Month-to-month balances then declined as folks paid down their payments. However for a yr, they remained about 10% above the place that they had been earlier than the medical expense. Balances for a comparable group of cardholders with no main medical expense stayed comparatively flat.

It’s unclear how a lot of the upper balances ended up as debt, because the institute’s information doesn’t distinguish between cardholders who repay their steadiness each month from those that don’t. However about half of cardholders nationwide carry a steadiness on their playing cards, which often provides curiosity and charges.


Money owed Giant and Small

For a lot of People, debt from medical or dental care could also be comparatively low. A couple of third owe lower than $1,000, the KFF ballot discovered.

Even small money owed can take a toll.

Edy Adams, a 31-year-old medical pupil in Texas, was pursued by debt collectors for years for a medical examination she obtained after she was sexually assaulted.

Adams had lately graduated from school and was dwelling in Chicago.

Police by no means discovered the perpetrator. However two years after the assault, Adams began getting calls from collectors saying she owed $130.68.

Illinois legislation prohibits billing victims for such checks. However irrespective of what number of instances Adams defined the error, the calls stored coming, every forcing her, she stated, to relive the worst day of her life.

Generally when the collectors referred to as, Adams would break down in tears on the telephone. “I used to be frantic,” she recalled. “I used to be being haunted by this zombie invoice. I couldn’t make it cease.”

Well being care debt may also be catastrophic.

Sherrie Foy, 63, and her husband, Michael, noticed their fastidiously deliberate retirement upended when Foy’s colon needed to be eliminated.

After Michael retired from Consolidated Edison in New York, the couple moved to rural southwestern Virginia. Sherrie had the house to take care of rescued horses.

The couple had diligently saved. And so they had retiree medical health insurance via Con Edison. However Sherrie’s surgical procedure led to quite a few problems, months within the hospital, and medical payments that handed the $1 million cap on the couple’s well being plan.

When Foy couldn’t pay greater than $775,000 she owed the College of Virginia Well being System, the medical middle sued, a once common practice that the college stated it has reined in. The couple declared chapter.

The Foys cashed in a life insurance coverage coverage to pay a chapter lawyer and liquidated financial savings accounts the couple had arrange for his or her grandchildren.

“They took every little thing we had,” Foy stated. “Now now we have nothing.”

About 1 in 8 medically indebted People owe $10,000 or extra, in keeping with the KFF ballot.

Though most anticipate to repay their debt, 23% stated it can take a minimum of three years; 18% stated they don’t anticipate to ever pay it off.

Medical Debt’s Large Attain

Debt has lengthy lurked within the shadows of American well being care.

Within the nineteenth century, male sufferers at New York’s Bellevue Hospital needed to ferry passengers on the East River and new moms needed to scrub flooring to pay their money owed, in keeping with a history of American hospitals by Charles Rosenberg.

The preparations had been principally casual, nevertheless. Extra usually, physicians merely wrote off payments sufferers couldn’t afford, historian Jonathan Engel stated. “There was no notion of being in medical arrears.”

Immediately, debt from medical and dental payments touches almost each nook of American society, burdening even these with insurance coverage protection via work or authorities applications similar to Medicare.


Practically half of People in households making greater than $90,000 a yr have incurred well being care debt up to now 5 years, the KFF ballot discovered.

Girls are extra doubtless than males to be in debt. And fogeys extra generally have well being care debt than folks with out kids.

However the disaster has landed hardest on the poorest and uninsured.

Debt is most widespread within the South, an evaluation of credit score data by the City Institute exhibits. Insurance coverage protections there are weaker, most of the states haven’t expanded Medicaid, and power sickness is extra widespread.


Nationwide, in keeping with the ballot, Black adults are 50% extra doubtless and Hispanic adults 35% extra doubtless than whites to owe cash for care. (Hispanics could be of any race or mixture of races.)

In some locations, such because the nation’s capital, disparities are even bigger, City Institute information exhibits: Medical debt in Washington, D.C.’s predominantly minority neighborhoods is almost 4 instances as frequent as in white neighborhoods.

In minority communities already scuffling with fewer academic and financial alternatives, the debt could be crippling, stated Joseph Leitmann-Santa Cruz, chief govt of Capital Space Asset Builders, a nonprofit that gives monetary counseling to low-income Washington residents. “It’s like having one other arm tied behind their backs,” he stated.

Medical debt may also preserve younger folks from constructing financial savings, ending their training, or getting a job. One evaluation of credit score information discovered that debt from well being care peaks for typical People of their late 20s and early 30s, then declines as they become old.

Cheyenne Dantona’s medical debt derailed her profession earlier than it started.

Dantona, 31, was identified with blood most cancers whereas in school. The most cancers went into remission, however when Dantona modified well being plans, she was hit with hundreds of {dollars} of medical payments as a result of certainly one of her main suppliers was out of community.

She enrolled in a medical bank card, solely to get caught paying much more in curiosity. Different payments went to collections, dragging down her credit score rating. Dantona nonetheless goals of working with injured and orphaned wild animals, however she’s been compelled to maneuver again in along with her mom exterior Minneapolis.

“She’s been trapped,” stated Dantona’s sister, Desiree. “Her life is on pause.”


Limitations to Care

Desiree Dantona stated the debt has additionally made her sister hesitant to hunt care to make sure her most cancers stays in remission.

Medical suppliers say this is among the most pernicious results of America’s debt disaster, holding the sick away from care and piling poisonous stress on sufferers when they’re most susceptible.

The monetary pressure can gradual sufferers’ restoration and even enhance their probabilities of dying, most cancers researchers have discovered.

But the hyperlink between illness and debt is a defining function of American well being care, in keeping with the City Institute, which analyzed credit score data and different demographic information on poverty, race, and well being standing.

U.S. counties with the very best share of residents with a number of power circumstances, similar to diabetes and coronary heart illness, additionally are likely to have probably the most medical debt. That makes sickness a stronger predictor of medical debt than both poverty or insurance coverage.

Within the 100 U.S. counties with the very best ranges of power illness, almost 1 / 4 of adults have medical debt on their credit score data, in contrast with fewer than 1 in 10 within the healthiest counties.


The issue is so pervasive that even many physicians and enterprise leaders concede debt has turn out to be a black mark on American well being care.

“There is no such thing as a purpose on this nation that individuals ought to have medical debt that destroys them,” stated George Halvorson, former chief govt of Kaiser Permanente, the nation’s largest built-in medical system and well being plan. KP has a comparatively beneficiant monetary help coverage however does generally sue sufferers. (The well being system shouldn’t be affiliated with KHN.)

Halvorson cited the expansion of high-deductible medical health insurance as a key driver of the debt disaster. “Persons are getting bankrupted once they get care,” he stated, “even when they’ve insurance coverage.” 

Washington’s Function

The Inexpensive Care Act bolstered monetary protections for tens of millions of People, not solely growing well being protection but in addition setting insurance coverage requirements that had been presupposed to restrict how a lot sufferers should pay out of their very own pockets.

By some measures, the legislation labored, research shows. In California, there was an 11% decline within the month-to-month use of payday loans after the state expanded protection via the legislation.

However the legislation’s caps on out-of-pocket prices have confirmed too excessive for many People. Federal laws permit out-of-pocket maximums on particular person plans as much as $8,700.


Moreover, the legislation didn’t cease the expansion of high-deductible plans, which have turn out to be commonplace over the previous decade. That has compelled many People to pay hundreds of {dollars} out of their very own pockets earlier than their protection kicks in.

Final yr the common annual deductible for a single employee with job-based protection topped $1,400, virtually 4 instances what it was in 2006, in keeping with an annual employer survey by KFF. Household deductibles can prime $10,000.

Whereas well being plans are requiring sufferers to pay extra, hospitals, drugmakers, and different medical suppliers are elevating costs.

From 2012 to 2016, costs for medical care surged 16%, virtually 4 instances the speed of general inflation, a report by the nonprofit Well being Care Value Institute discovered.

For a lot of People, the mix of excessive costs and excessive out-of-pocket prices virtually inevitably means debt. The KFF ballot discovered that 6 in 10 working-age adults with protection have gone into debt getting care up to now 5 years, a charge solely barely decrease than the uninsured.

Even Medicare protection can go away sufferers on the hook for hundreds of {dollars} in costs for medication and remedy, studies show.

A couple of third of seniors have owed cash for care, the ballot discovered. And 37% of those stated they or somebody of their family have been compelled to chop spending on meals, clothes, or different necessities due to what they owe; 12% stated they’ve taken on additional work.

The widespread burden of medical debt has sparked new curiosity from elected officers, regulators, and trade leaders.

In March, following warnings from the Shopper Monetary Safety Bureau, the main credit reporting companies said they might take away medical money owed underneath $500 and people who had been repaid from client credit score reviews.

In April, the Biden administration announced a brand new CFPB crackdown on debt collectors and an initiative by the Division of Well being and Human Providers to assemble extra data on how hospitals present monetary support.

The actions had been applauded by affected person advocates. Nonetheless, the modifications doubtless gained’t tackle the basis causes of this nationwide disaster.

“The No. 1 purpose, and the No. 2, 3, and 4 causes, that individuals go into medical debt is that they don’t have the cash,” stated Alan Cohen, a co-founder of insurer Centivo who has labored in well being advantages for greater than 30 years. “It’s not difficult.”

Buck, the daddy in Arizona who was denied care, has seen this firsthand whereas promoting Medicare plans to seniors. “I’ve had outdated folks crying on the telephone with me,” he stated. “It’s horrifying.”

Now 30, Buck faces his personal struggles. He recovered from the intestinal an infection, however after being compelled to go to a hospital emergency room, he was hit with hundreds of {dollars} in medical payments.

Extra piled on when Buck’s spouse landed in an emergency room for ovarian cysts.

Immediately the Bucks, who’ve three kids, estimate they owe greater than $50,000, together with medical payments they placed on bank cards that they will’t repay.

“We’ve all needed to reduce on every little thing,” Buck stated. The children put on hand-me-downs. They scrimp on college provides and depend on household for Christmas items. A dinner out for chili is an extravagance.

“It pains me when my children ask to go someplace, and I can’t,” Buck stated. “I really feel as if I’ve failed as a mother or father.”

The couple is getting ready to file for chapter.

About This Mission

“Prognosis: Debt” is a reporting partnership between KHN and NPR exploring the size, affect, and causes of medical debt in America.

The collection attracts on the “KFF Health Care Debt Survey,” a ballot designed and analyzed by public opinion researchers at KFF in collaboration with KHN journalists and editors. The survey was performed Feb. 25 via March 20, 2022, on-line and by way of phone, in English and Spanish, amongst a nationally consultant pattern of two,375 U.S. adults, together with 1,292 adults with present well being care debt and 382 adults who had well being care debt up to now 5 years. The margin of sampling error is plus or minus 3 share factors for the complete pattern and three share factors for these with present debt. For outcomes based mostly on subgroups, the margin of sampling error could also be larger.

Further analysis was conducted by the Urban Institute, which analyzed credit score bureau and different demographic information on poverty, race, and well being standing to discover the place medical debt is concentrated within the U.S. and what components are related to excessive debt ranges.

The JPMorgan Chase Institute analyzed records from a sampling of Chase bank card holders to have a look at how prospects’ balances could also be affected by main medical bills.

Reporters from KHN and NPR additionally performed lots of of interviews with sufferers throughout the nation; spoke with physicians, well being trade leaders, client advocates, debt legal professionals, and researchers; and reviewed scores of research and surveys about medical debt.

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