Millions of Americans crippled by medical debt despite relief efforts
Stopgap measure does not solve fundamental problem that millions can’t afford the healthcare they need, experts say Some of the millions of Americans who collectively owe billions of dollars for medical expenses have seen their debt forgiven in recent years, and there has been a dramatic uptick in aid this year. But the relief still only covers a small fraction of the outstanding balance and is…
Millions of Americans are still struggling with crippling medical debt despite recent relief efforts, experts warn. Although some have seen their debt forgiven and there has been a surge in aid this year, the relief only addresses a small part of the total outstanding balance. The issue lies in the affordability crisis in healthcare, according to experts. In 2024, Americans owed at least $220 billion in medical debt, with 14 million owing over $1,000 and 3 million owing more than $10,000.
High costs and lack of health insurance make it difficult for people to afford necessary care. Even those with insurance often face high deductibles and cost-sharing provisions, making bills unaffordable. Patients frequently fall behind on payments, and in 2024, 21% of US households had a past-due medical bill. Undue Medical, founded by former debt collection executives, purchases large portfolios of debt at a significant discount, erasing $100 of medical debt for every $1 donation.
Other nonprofits, such as Dollar For and the HealthWell Foundation, offer financial assistance to help reduce or eliminate medical debt. The Community Service Society of New York successfully advocated for state legislation to prevent hospitals from sharing patient medical debt with consumer reporting agencies. Undue Medical has provided $53.3 billion in medical debt relief, with half of that coming this year due to investments in technology and partnerships with governments.
While this assistance is a stopgap for those in need, experts argue that it is a temporary solution. Providers must do more to make patients aware of financial assistance programs. For example, in Missouri, less than a quarter of adults reported being informed about free or discounted care from providers. States are implementing measures to increase financial assistance for patients, with federal law requiring nonprofit hospitals to establish such policies, and 18 states requiring all hospitals to offer assistance with minimum eligibility standards.
The Biden administration banned medical debt on credit reports, though a federal court blocked it. Nonetheless, 16 states prohibit or restrict the inclusion of medical debt on credit reports, impacting people's credit ratings due to healthcare issues beyond their control.
Written by urgent.news from The Guardian US's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
