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23% of Americans Have Medical Debt (and Other Stats)

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Nearly a quarter of Americans have medical debt, according to a LendingTree survey fielded earlier in 2022. These medical expenses are often unforeseen, which can be problematic for Americans without established emergency funds, with small credit card limits or other roadblocks.

Not only that, but medical debt can lead to other kinds of debt, potentially increasing your likelihood of needing to file for bankruptcy.

Here’s our roundup of medical debt statistics so you can better understand its impact and implications.

Key findings

  • 23% of Americans have medical debt, according to a recent LendingTree survey. Another 22% say they’ve previously had medical debt.
  • Millennials are most likely to have medical debt. 30% of millennials say they have it, according to the LendingTree survey, versus 24% of Generation Xers, 22% of Gen Zers and 13% of baby boomers.
  • Parents with younger children have a higher rate of medical debt than those with older children or those without children. 30% of parents with children younger than 18 have medical debt, according to the LendingTree survey, versus 20% of those without children and 19% of those with only adult children.
  • Lower earners are twice as likely to have medical debt than higher earners. The LendingTree survey found that 28% of those who make $35,000 or less annually say they have medical debt, versus 14% who make $100,000 or more yearly.
  • Consumer credit reports contain $88 billion in medical debt, according to a February 2022 report from the Consumer Financial Protection Bureau (CFPB). The CFPB estimates the total in collections is higher because of data not provided to credit-reporting agencies. Recently, a July 1, 2022, change was expected — per the three major credit-reporting agencies — to remove nearly 70% of medical debt from credit reports.
  • Medical debt isn’t equally distributed across the U.S. According to the U.S. Census Bureau 2018 Survey of Income and Program Participation (highlighted in an April 2021 Census Bureau article), 22% of Southern households have medical debt. That compares with 20% in the Midwest, 16% in the Northeast and 15% in the West.
  • Black households have the highest rate of medical debt. 28% of Black households have medical debt, according to the 2018 Census Bureau survey, followed by Hispanic households (22%), white households (17%) and Asian households (10%).
  • 4% of households have “high” medical debt. That’s defined as exceeding 20% of a household’s annual income, according to the 2018 Census Bureau survey. That figure jumps to 9% among households with at least one person in poor or fair health and 9% in households without full health insurance coverage.
  • Households without full health insurance are nearly twice as likely to have medical debt. 31% of households without full health insurance carry medical debt, compared with 16% of fully covered households.
  • 6% of U.S. adults owe more than $1,000 in medical debt. According to a 2022 Kaiser Family Foundation analysis of Census Bureau data, an estimated 1% of adults owe more than $10,000.

45% of Americans have (or have had) medical debt

Nearly 1 in 4 (23%) Americans currently have medical debt, while another 22% say they’ve previously had medical debt, according to a recent LendingTree survey. Here’s how it breaks down generationally:

  • Millennials ages 26 to 41: 30%
  • Generation Xers ages 42 to 56: 24%
  • Gen Zers ages 18 to 25: 22%
  • Baby boomers ages 57 to 75: 13%

At first glance, Gen Zers may seem like an anomaly since they represent the youngest demographic examined and may not be able to afford good insurance or medical emergencies. However, it’s important to note that millennials have aged out of being on their parents’ health insurance, while Gen Zers may still have that option.

“I think the biggest reason millennials have the most medical debt is where they are in life,” says Matt Schulz, LendingTree chief credit analyst. “The oldest millennials are over 40 now and have families, and the truth is that once kids enter the picture, life gets way more expensive. There are a million reasons for that, but one is medical care. Even for the healthiest of kids, doctor bills can add up quickly, putting a major strain on the family budget.”

In fact, regardless of generation, 30% of parents with children younger than 18 have medical debt, according to the LendingTree survey, versus 20% of those without children and 19% of those with only adult children.

And income can significantly impact your chances of taking on medical debt. Those who earn less than $35,000 a year (28%) are twice as likely to have medical debt than those who make $100,000 or more (14%). Here’s a look at the rest of the income brackets:

  • Those who earn $50,000 to $74,999 (24%)
  • Those who earn $35,000 to $49,999 (22%)
  • Those who earn $75,000 to $99,999 (21%)

The LendingTree survey found men and women have the same rate of people with medical debt as the national average of 23%.

Credit reports contain $88 billion in medical debt

Medical debt can have a major impact on your finances. And, until recently, it was more prominently on consumer credit reports — to the tune of $88 billion, according to a February 2022 report from the CFPB. (The CFPB estimates that the total in collections is higher because of data not provided to credit-reporting agencies.)

A higher rate of Americans appears to take on medical debt as time passes, data shows, which can negatively impact individuals’ credit scores if they fall behind on payments.

But national credit-reporting companies Equifax, Experian and TransUnion announced in March that they were removing what they identified as nearly 70% of medical debt from credit reports as of July 1:

  • Paid medical debts won’t appear on consumers’ credit reports
  • Unpaid medical debts can’t be reported until one year after they go into collections, compared with 180 days (or six months) previously
  • Beginning in 2023, medical collections with balances below $500 will no longer appear on consumer credit reports
“​​This is a big, big deal,” Schulz says. “A huge number of people will see their credit scores rise when this debt leaves their credit report. Your mileage may vary, depending on the rest of your credit history, but this move has the potential to be a game-changer for people.”

According to a July report from the CFPB, about half of consumers who currently have medical collection tradelines on their credit reports should have seen those fall off because of the reporting changes. That differs from the nearly 70% figure from the credit-reporting agencies. Either way, this could potentially boost Americans’ credit scores.

As Schulz notes, a lower credit score can cost you thousands over the years and may even prevent you from meeting financial goals.

“Depending on your individual circumstances, a few points up or down can be the difference between rejection and approval for a loan,” he says.

Several states, including California, Maryland and New Mexico, have also recently enacted laws designed to provide more consumer protection around medical debt collection, which could help improve circumstances, too.

Medical debt not even across regions, races, more

Where you live can impact your likelihood of having medical debt. For example, here’s how things stack up in different regions, according to an April 2021 article highlighting data from the U.S. Census Bureau 2018 Survey of Income and Program Participation:

  • Southern households: 22%
  • Midwestern households: 20%
  • Northeastern households: 16%
  • Western households: 15%

Interestingly, all but one of the states that has yet to expand Medicaid are in the South or the Midwest. And the average medical debt in those states that didn’t expand dropped by 10% between 2013 and 2020. That’s compared with a 44% decrease in the states that expanded Medicaid. Access to Medicaid appears to be a strong factor here.

Race is another area where medical debt isn’t evenly distributed. For instance:

  • Black households with medical debt: 28%
  • Hispanic households with medical debt: 22%
  • White households with medical debt: 17%
  • Asian households with medical debt: 10%

The Census Bureau also found that 4% of households have “high” medical debt, defined as debt exceeding 20% of a household’s annual income. (For example, if you earn $50,000 a year, that would be at least $10,000 of medical debt.)

Of course, your health and insurance status have a large impact. For example, the figure for high medical debt jumps to 9% among households with at least one person in poor or fair health, as well as among households without full health insurance coverage. (This isn’t helped by the fact that almost half of those with medical debt purposely avoid care, as a 2016 Stanford study cited by the CFPB found.) Households without full health insurance (31%) are also almost twice as likely to have medical debt than those who are fully covered (16%).

How much Americans owe in medical debt

According to a 2022 Kaiser Family Foundation analysis of Census Bureau data, 6% of U.S. adults owe more than $1,000 in medical debt. And 1% of adults owe more than $10,000. For the most part, Americans aren’t being saddled with huge medical bills.

“That doesn’t mean that it isn’t worrisome,” Schulz says. “That debt is money you can’t put toward an emergency fund, retirement savings, a college fund or starting a small business. For others, it can make it difficult to put food on the table.”

Shopping around for more affordable options (hospitals are required to provide fee schedules for services, as of 2021), using in-network providers when possible and ideally having some savings can help prevent you from taking on medical debt.

But if you do find yourself in that situation, there are options. For example, nonprofit hospitals are required to provide financial assistance to patients.

“If you’re struggling with debt, consider negotiating your bill with your medical provider,” Schulz says. “There’s no guarantee that it will work, but if it does, the savings can be significant. You can also ask if there is an interest-free payment plan available.”

Sources

  • LendingTree survey fielded in May 2022
  • Consumer Financial Protection Bureau (CFPB) report on “Medical Debt Burden in the United States,” published in February 2022
  • 2018 U.S. Census Bureau Survey of Income and Program Participation (SIPP), highlighted in an April 2021 Census Bureau article and released in August 2020
  • Peterson-KFF Health System Tracker article on medical debt
 

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