New research in JAMA, the Journal of the American Medical Association, reveals that medical debt in the United States before the COVID-19 pandemic was much higher than previous estimates. The study found that nearly 18% of individuals had medical debt in collections, with an average of $429 per person. Medical debt is the number one cause of debt collection nationally, outpacing all other debts combined. 

Previously, it was estimated that Americans owed around $81 billion in medical debt. This new research indicates that the number is closer to $140 billion—not accounting for medical debt incurred during the COVID-19 pandemic.

Debt rates and average debt amounts varied widely nationally and across incomes. People in the South were the most likely to have medical debt in collections (23.8%) and had the highest average medical debt in collections ($616). By contrast, people in the Northeast were the least likely to have medical debt in collections (10.8%) and owed the least ($167). Unsurprisingly, zip codes with lower incomes showed higher levels of debt ($677) compared to zip codes with higher incomes ($126). 

While the pre-pandemic debt numbers were drifting down from a peak in 2010, people in states that did not expand Medicaid were being left behind. Between 2013 and 2020, Medicaid expansion states showed a 34% greater decline in average medical debt in collections (from $330 to $175) than non-expansion states (from $613 to $550). And the gap between lower and higher income zip codes was shrinking in expansion states while growing in non-expansion states.

These striking differences show another reason for states to expand Medicaid access. While medical debt has not disappeared in states that have expanded Medicaid, the expansion has, presumably, reduced the burden on eligible beneficiaries. 

Medical debt is only one symptom of health care proving unaffordable and inaccessible for too many, including older adults. We urge policymakers to work toward deep, long-lasting solutions to ensure that all people can gain access to the care and coverage they need for their well-being and financial stability.

Read more about the study.

Read the study abstract and access the full study.