Having Health Insurance Doesn’t Prevent Medical Debt
A new survey finds that one third of insured Americans are paying off medical bills.
Despite the widespread belief that health insurance protects individuals from financial ruin, a recent survey reveals that this is not always the case. Conducted by the Commonwealth Fund, the survey found that nearly one-third of adults aged 19-64 with private insurance had unpaid medical bills or medical debt in 2025. Moreover, half of those paying off medical debts owed $2,000 or more.
One of the primary reasons for medical debt, according to senior scholar Sara R. Collins, is routine care, which includes doctor's office visits and treatment for chronic conditions. Another significant factor is high deductibles. The study, which included interviews with over 6,300 adults in 2025 and focus group discussions, also highlighted that many people were surprised by the high cost of their medical bills despite having insurance.
The issue of insured Americans facing medical debt may worsen in the future as health insurance becomes less affordable. According to a survey by Marsh, the cost of health benefits per employee is projected to increase by 8.2% in 2027, the highest rise since 2003. Some employers may respond by downgrading their plans and shifting more costs to employees.
Furthermore, the loss of subsidies for people purchasing insurance from Affordable Care Act Exchanges could lead to more consumers opting for lower-quality plans, which may result in higher costs if they face catastrophic or chronic health issues.
The Commonwealth Fund's study found that 30% of respondents cut back on basic necessities like food, heat, or rent to afford healthcare, and 37% of those with medical debt used their savings to pay their bills. Those who experience medical debt often avoid seeking further medical care, which can lead to higher expenses in the long run as they may require emergency services instead of less expensive preventative care.
The fear of having medical debt negatively impact credit scores is significant, with 15 states having passed laws limiting the use of medical debt in lending decisions and on credit reports. However, the Consumer Financial Protection Bureau's proposed federal rule to prevent medical debt from appearing on credit reports and influencing credit decisions was overturned by a federal court in July 2025 after the Trump Administration took office.
Written by urgent.news from Time's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
