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Learn what role medical debt plays in driving health inequity – and how providers can help close the gaps.

Millions of adults in the U.S. struggle to bear the weight of soaring health care costs. A June 2022 survey from Gallup showed that nearly 40% of Americans — an estimated 98 million people — had delayed or skipped healthcare treatments, cut back on regular household expenses, or borrowed money in the previous six months due to high costs of medical care.

People are also carrying higher amounts of medical debt. According to a KFF poll, 50% of American adults report being in debt due to medical or dental bills in the last five years. But the burden can be heavier for disadvantaged populations.

Why is medical debt considered a social determinant of health (sdoh) — and how does it drive health inequity?

Evidence shows that higher wealth correlates with better health. A study of individuals in the U.S. and England showed that in both countries, men and women tended to live eight to nine more disability-free years after age 50 than their counterparts in lower income brackets. 

Numerous studies show an inverse relationship between carrying personal debt and overall health. People in debt have an elevated risk of hypertension and other chronic diseases. Symptoms of depression have also been linked to debt, with higher debt leading to increased symptoms and vice versa. 

As the highest contributor to personal debt, medical debt can directly affect an individual’s health and well-being. Debt can also prevent people from building savings, pursuing careers and education, and participating in activities that offer social connection or a chance to de-stress. 

Even worse, debt could force people to forgo basic necessities. A KFF survey showed that in the past five years, 63% of adults with healthcare debt cut back spending on food, clothing, and essential household items.

High costs can also lead people to defer or avoid seeking healthcare altogether. According to Gallup, 26% of adults delayed or avoided medical care or purchasing prescription drugs in the six months prior to the survey due to higher healthcare prices. In lower-income households — those making less than $24,000 — that number rises to 43%.

Putting off preventive care or treatment until symptoms are too severe to ignore can exacerbate symptoms and worsen conditions, ultimately costing people more money and driving them further into debt.

Which groups are most at risk for medical debt?

Medical debt disproportionately affects people living with disabilities, lower-income households, people of color, and other disadvantaged groups. 

A report from the Urban Institute evaluated counties with the highest rates of medical debt. The report revealed these shared factors in the top 10 counties:

  • Higher rates of uninsured people
  • An average household income lower than the national average
  • Higher prevalence of chronic conditions than the national average
  • Higher percentage of Black or Hispanic residents compared to the national average in most of the 10 counties

Lower-income households

A study from JAMA showed that average medical debt was typically highest in the South and in lower-income communities, specifically in states that did not participate in the Affordable Care Act’s Medicaid expansion program. 

While cutting costs to afford healthcare is shared across all socioeconomic statuses, the KFF survey revealed a great divide between lower and higher income brackets. Seventy percent of households earning less than $40,000 said they cut expenses compared to 51% of those earning over $90,000.

People in lower income brackets were also more likely to take drastic measures to afford medical care. More than 50% of households with income less than $40,000 said they used all or most of their savings due to their debt, compared to 37% of households making more than $90,000. This loss of savings further strains already financially disadvantaged households, leaving them more vulnerable to future expenses.

People of color

Racial and ethnic disparities in healthcare affordability and access are well documented. According to a KFF poll, 56% of Black and 50% of Hispanic adults have medical or dental debt, compared to 37% of White adults. People of color are also more likely to be uninsured. Additionally, nearly 30% of Black adults and 21% of Hispanic adults said they wouldn’t be able to afford quality healthcare if they needed it compared to 16% of White adults. 

People with disabilities or chronic health conditions

People who have significant health needs may require ongoing care, which can lead to higher debt. Adults living with a disability are more likely to owe more than $250 in medical debt than those without a disability. People with sizable medical debt are also more likely to rate their health status as “fair” or “poor.” 

Chronic conditions or severe illnesses can financially devastate a household. According to a survey from the American Cancer Society Cancer Action Network (ACS CAN), 54% of patients and survivors were unprepared to pay for their care. Fifty-three percent of surveyed patients carrying cancer-related medical debt saw it go into collections. And nearly a quarter of respondents had total debt of more than $10,000.

How providers can ease the pain

Hospitals and other healthcare providers can’t solve the medical debt crisis alone, but they can take steps to ease some of the financial burden that disadvantaged groups face. 

Improve financial solutions and repayment programs

Providers should assess their current patient payment options, looking for opportunities to expand access and create patient-friendly repayment plans. The right fintech solution can provide flexible, interest-free payment plans for all patients regardless of their credit profile. Those most in need of financial assistance can get access to an affordable plan that fits their unique situation. Providers can eliminate debt collection efforts from the patient experience and yet improve their collection rates and accelerate cash flow—a win-win situation.

Leverage data mining to identify patients who are at risk for medical debt

Hospitals and health systems should proactively determine which patients may struggle to pay medical bills and where inequities may exist. By identifying patients eligible for financial assistance or other repayment programs, data-driven solutions can help prevent financial repercussions for patients and ensure providers don’t end up carrying the cost burden.

Help patients make informed decisions

Clinicians and the patient’s care team can help patients understand their healthcare costs and out-of-pocket expectations before receiving care. Provide education and training to make cost-of-care conversations a routine part of the care process. When done effectively, these conversations can alert care teams to patient eligibility for financial assistance or repayment options that best fit their needs.


Medical debt is a critical social determinant of health that continues to strain patients, contributing to worsening health disparities. However, healthcare providers can take steps to help close these gaps without hurting revenue cycle management. Greater equity is achievable with a thoughtful, strategic approach. A patient affordability solution like PayZen is a key place to start, offering personalized and flexible payment options that help patients get the care they need at a cost they can afford.

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