The Impact of Medical Debt on Financial Stability in the U.S: An Analysis

Zara Nwosu
New Update

The Impact of Medical Debt on Financial Stability in the U.S: An Analysis

Understanding the Burden of Medical Debt in the U.S.

Recent data from the Kaiser Family Foundation (KFF) paints a worrying picture of the financial situation for many adults in the United States. Despite over 90% of the population having some form of health insurance, medical debt remains a significant concern. The 2022 Health Care Debt Survey reveals that 23% of adults had unpaid and overdue medical or dental bills, while 41% had some form of health care debt. This problem is not confined to any specific income group, and its impact on financial stability can be severe. People with medical debt are more likely to demonstrate signs of financial vulnerability, such as having no emergency savings, overdrawing their checking accounts, or resorting to high-interest loans.

The Volume of Medical Debt in the U.S.

A government data analysis estimates that people in the United States owe at least $220 billion in medical debt. Approximately 14 million people, equivalent to 6% of adults, owe more than $1,000 in medical debt, and about 3 million people (1% of adults) owe over $10,000. Medical debt varies by age, race, ethnicity, health status, and disability status. Despite health insurance coverage, 15% of households, roughly 20 million people, owed medical debt in 2021. Middle-aged adults, Black people, and women were more likely to report having medical debt.

Financial Vulnerability and Medical Debt

Medical debt can deplete savings, force families to forgo basic necessities, and divert resources away from other essential needs. The National Financial Capabilities Survey (NFCS) found that adults with medical debt are more likely to show signs of financial vulnerability across a range of financial measures, even when they are insured. This situation often leads to a delay or complete avoidance of needed medical care due to cost concerns. Individuals without health insurance, those with low and middle incomes, and those living in rural areas or the South are more likely to have medical debt.

Policy Initiatives to Address Medical Debt

In response to the growing issue of medical debt, the Consumer Financial Protection Bureau is expected to introduce requirements to remove medical debt from credit reports and regulate debt collection practices. These steps may provide some relief to those struggling with medical debt, but they do not address the root causes of high healthcare costs. As such, more comprehensive measures will be required to truly tackle the issue of medical debt in the United States.


The burden of medical debt in the U.S. is a multifaceted problem that affects people across income levels and demographics. It is a major contributor to financial instability and can lead individuals to delay or avoid necessary medical care. The data underscores the urgent need for policy interventions to manage healthcare costs and alleviate the burden of medical debt on U.S. adults. While measures to remove medical debt from credit reports and regulate debt collection practices are welcome, they must be part of a broader strategy to address the high cost of healthcare in the United States.