Medical debt has become a defining feature of the U.S. healthcare system, affecting millions of individuals and families. According to the Federal Reserve Bank of New York, total household debt rose to an average of $17.06 trillion in the second quarter of 2023. Between 2022 and 2023, consumer debt—which includes medical debt—balances increased by 4.15%.
One KFF report found that nearly 9% of U.S. adults (about 23 million people) owed medical debt. Of these, 11 million had balances greater than $2,000, and 3 million owed more than $10,000. This debt burden extends beyond medical expenses, affecting individuals’ financial well-being and security.
People with medical debt are significantly more likely than those without medical debt to show other signs of financial vulnerability, such as overdrawing a checking account or relying on costly loans, according to a new KFF analysis that surveyed national data.
The impact of medical debt is not limited to financial strain. It also correlates with other signs of financial stress and vulnerability. These statistics alone indicate that medical debt remains a significant issue—and those with health insurance are not excluded. This underscores the country’s complex and challenging healthcare costs and highlights the systemic problems within the U.S. healthcare system.
So, What’s the Solution?
The implications of medical debt extend beyond financial stress. Individuals burdened by medical debt often face challenges accessing necessary care, leading to further health complications. Addressing medical debt requires a multifaceted approach that includes policy reforms, improved access to affordable healthcare, and greater financial literacy among consumers.
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