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More than 90% of Americans have some form of health coverage, according to the Peterson-KFF Health System Tracker. So why does medical debt continue to grow? A recent JAMA analysis shows that the rising cost of healthcare, increased cost sharing, and the millions of people who remain uninsured all play a role. 

Here are seven eye-opening data points that illustrate how medical debt impacts patients and providers–and how providers can help solve the problem.


1. Total U.S. Medical Debt Is Estimated at $195 Billion.

Total medical debt in the United States is estimated at $195 billion, according to a KFF study. About 3 million Americans owe $10,000 or more, and another 13 million people owe between $1,000 and $10,000. Those affected often forgo visits to their healthcare providers rather than incur additional debt.


2. 40% of Consumers Would Have Trouble Paying an Unexpected $400 Bill.

The overall debt burden isn’t surprising, given that about 40% of Americans say they’d have trouble paying an unexpected medical expense of $400. In a Federal Reserve survey, respondents said they would:

  • Put the bill on a credit card and pay it off over time (16%)
  • Borrow from a family member or friend (10%)
  • Sell something to cover the cost (6%)
  • Use a bank loan or line of credit (3%)
  • Use a payday loan, deposit advance, or overdraft (2%)
  • Not pay the bill (12%)

Paying for treatment with high-interest credit cards and other options can compound patient debt over time, putting affordable healthcare even further out of reach.  


3. One in Seven Americans Have Been Denied Care Because of Unpaid Medical Bills.  

Medical debt can impact patients’ ability to get necessary care. One in seven (14.3%) people say healthcare providers have denied them the care they need because of unpaid bills, the Petersen-KFF Health System Tracker notes. 

Meanwhile, 1 in 11 adults say they’ve delayed or avoided medical care because they can’t afford the cost. Deferring healthcare can further drive up the cost of treatment, as manageable medical conditions become acute emergencies.


4. Black and Hispanic Adults Are Likelier to Have Problems Paying Medical Bills.

Medical debt is a wide-ranging problem, but some communities are affected more than others. According to a Consumer Financial Protection Bureau report, medical debt disproportionately impacts Black and Hispanic households. Here’s the percentage of each group that has medical debt:

  • Black: 27.9%
  • Other, including Native Americans: 23.3%
  • Hispanic: 21.7%
  • White (Non-Hispanic): 17.2%
  • Asian: 9.7%

Government regulators are putting increased emphasis on reducing health inequity. For instance, the Centers for Medicare and Medicaid Services ACO REACH program requires participating providers to have plans to reduce health inequity. Providers who help reduce financial barriers can help improve access to medical care for everyone.


5. People 35 and Older Are More Likely to Have Medical Debt.

A KFF report shows that people between the ages of 35-49 (11%) and 50-64 (12%) are likelier to report medical debt than those in other age brackets. These patients have more healthcare needs than younger adults, but they’re not old enough to qualify for Medicare coverage. 

Manageable payment plans can help patients in these age groups afford the care they need without racking up high-interest credit card debt. 


6. The Average Family Pays Over $22,000 a Year for Health Insurance. 

Having insurance isn’t enough to prevent medical debt. Even people who have employer-provided health benefits, or are enrolled in Medicare, can incur medical bills they can’t afford, thanks to:

  • The rising cost of premiums. Employee costs for employer-provided health insurance plans rose 4% in 2021, according to KFF. The average annual premiums: $7,739 for individual coverage and $22,221 for a family.
  • High deductibles. The average deductible (what consumers pay before their insurance kicks in) is $4,364 for individuals and $8,439 for a family
  • Copayments. After consumers reach their deductible, they are often responsible for a copayment of up to 20% for medical care they receive.

Manageable payment plans can’t ease the cost of premiums, but they can help patients prepare for and deal with high deductibles and copays.


7. Nearly 1 in 5 Households Has Skipped Necessary Healthcare.

Medical debt does more than affect a patient’s financial well-being. It can have a significant impact on their health as well. Consider this:

  • A Gallup poll found that 18% of U.S. households skipped necessary healthcare in 2020 because they couldn’t afford it. Families earning less than $24,000 annually were most likely to skip needed care. 
  • Patients may cope with the stress of medical debt with risky health behaviors such as smoking, increased alcohol consumption, and poor nutrition, The Sycamore Foundation notes. Stress can get even worse when debt is turned over to a collection agency.

Providers who help their patients manage medical debt can reduce their stress, too. That can lead to better clinical outcomes in addition to helping maintain the provider’s revenue stream.  


What Providers Can Do to Solve the Problem

When it comes to collecting medical debt, hospitals and other healthcare providers often rely on traditional approaches, like working with a third-party collections agency. Aside from the poor patient experience, these methods fall short because they don’t address the root problem of affordability, especially as patients’ share of medical costs continues to increase.

Fortunately, there’s a way providers can improve affordability and their collections rate: working with a fintech partner such as PayZen to offer patient-friendly payment options. Fintech solutions support patient affordability and healthcare system profitability by: 

  • Increasing the provider’s collections rate and accelerating cash flow
  • Offering flexibility based on patients’ unique financial situations
  • Freeing provider staff to focus on mission-critical tasks
  • Improving healthcare access and the patient experience

Affordable payment plans work best when they:

  • Are interest-free
  • Have no additional fees beyond the actual cost of care 
  • Don’t require minimum credit scores for approval, but are available to all
  • Are automated and easy for patients to self-manage



Even as medical costs continue to rise, healthcare providers can help their patients afford the care they need and improve their cash flow at the same time. Financial technology offers an automated, personalized, and flexible approach to patient affordability. Accessible payment options not only help patients pay on time–they also help relieve the burden of medical debt and ultimately drive better health outcomes. 


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