One-third of Americans burdened by medical debt: study

By Noah Tong / October 26, 2023

Insurance coverage often fails to help Americans avoid medical debt, a new survey from the Commonwealth Fund revealed.

The report showed that, in addition to the 51% of Americans that struggle to afford their healthcare, there is growing concern over medical expenses causing worse health and economic outcomes.

“While having health insurance is always better than not having it, the survey findings challenge the implicit assumption that health insurance in the U.S. buys affordable access to care,” said the study’s authors.

Large segments of insured adults surveyed said it was difficult to afford healthcare, including 43% with employer coverage, 57% with individual plans, 45% with Medicaid and 51% with Medicare. This causes the respondents to delay or skip healthcare or prescription drugs necessary to treat an illness, according to 29% of people with employer coverage, 37% of people with market plans, 39% of Medicaid enrollees and 42% of Medicare beneficiaries.

As medical debt grows, the problem persists and leads to worse health outcomes down the line, the study finds. More than 6 in 10 Medicare enrollees said their conditions deteriorated after cost-driven delays to care, and one-third of people with Medicare are paying off medical debt.

“Most people who have medical debt carry a lot of it: 85% reported total debt loads of $500 or more, and nearly half said they were paying off $2,000 or more,” said the study. “This means that among all working-age adults in the United States, an estimated 27% are currently carrying medical debt of more than $500, and 15% have medical debt loads of $2,000 or more.”

The uninsured population surveyed found it even more difficult to afford healthcare costs, unsurprisingly. More than three-quarters of uninsured respondents said they find it very or somewhat difficult to afford healthcare bills, while 64% said they delayed or skipped pressing healthcare or prescription drug needs.

This leads to anxiety or worry for 78% of respondents and caused a sizable portion of people to cut back on basic necessities, use up savings or receive a lower credit rating.

The Commonwealth Fund said policies such as prohibiting medical debt from appearing on consumer credit reports, requiring providers to allow debt repayment grace periods following illness, slowing cost growth in commercial markets, adjusting premiums and cost sharing based on employee income, reforms to the federal Employee Retirement Income Security Act, increasing the Affordable Care Act’s minimum employer health benefit standards and lowering deductibles and out-of-pocket costs in marketplace plans could all decrease the burden Americans feel on their wallet.

The study surveyed 6,121 adults under the age of 65.