23M Americans Owe 'Significant' Medical Debt

In addition, 6% of adults in the U.S. owe more than $1,000 in medical debt, and 1% of adults owe medical debt of more than $10,000.

Twenty-three million people (nearly 1 in 10 adults) owe "significant" medical debt of more than $250 in unpaid medical bills as of December 2019, according to a new research brief from the Peterson-KFF Health System Tracker.

It used the survey of income and program participation to conclude that many people have "significant" medical debt: 6% of adults in the U.S. owe more than $1,000 in medical debt, and 1% of adults owe medical debt of more than $10,000.

However, the research brief also found that the burden of medical debt isn't evenly distributed. Although all demographic groups experience medical debt, certain groups of people are disproportionately affected by significant medical debt.

For instance, middle-aged adults are more likely than young adults to have significant medical debt, which makes sense considering people's health often deteriorates as they age.

However, in a telling twist, the share of adults with significant medical debt decreases when people reach Medicare age: 12% of adults ages 50 to 64 report having significant medical debt, compared to just 6% for those ages 65 to 79.

In addition, Black Americans are far more likely to report significant medical debt: 16% of Black Americans report have significant medical debt, compared to 9% of white and 4% of Asian Americans.

Also unsurprising is that women are more likely to report having medical debt (11%) than men (8%) likely because of childbirth expenses and lower average income among women. In fact, an unrelated study recently showed that pregnancy and delivery can cost some patients close to 20% of their annual income.

Significant medical debt is also more common for people with disabilities and poorer health status. Disabled adults are more likely to report owing over $250 in medical debt (15% vs. 7%). Similarly, significant medical debt is more likely for people who say their health status is "fair" or "poor" than whose health is "very good" or "excellent."

Income and insurance status also plays a role. For instance, 12% of adults with incomes below 400% of the federal poverty level saying they have significant medical debt.

According to the research, other people that are more likely to be burdened by significant medical debt include people living in:

• Rural areas
• The South
• States that did not expand Medicaid under the Affordable Care Act

Although it doesn't solve the problem of significant medical debt, there was a recent glimmer of hope for people with trouble paying it.

Equifax, Experian, and TransUnion announced that:

• Paid medical collection debt will no longer be included on consumer credit reports as of July 1.
• Medical collection debt won't appear on a consumer's credit report until it's been unpaid for a year, instead of the current six months, as of July 1.
• Equifax, Experian, and TransUnion will no longer include medical collection debt under at least $500 on credit reports starting in the first half of 2023.