After a job loss and a divorce last year, Mike Jackson began having trouble paying his medical bills. To save money, he cut back on the insulin he needs for his diabetes, planning to manage his condition with diet and a smaller dosage. His efforts left him with numbness in his feet and toes and nerve damage to his eye, complications he is now struggling to treat—and pay for.

"If anything goes wrong,” Jackson told NPR, “I'm one step away from disaster."

Jackson is not alone. Nearly one in three black Americans ages 18 to 64 have past-due medical bills—a disconcertingly high number given the potential consequences for both physical and financial health.

Past-due medical bills can end up in your credit report and lower your credit score, which means you may not be able to borrow for a mortgage or small business—or you may pay more when you do borrow.

Credit report information can also be used to determine whether you get a job or rent an apartment and how much you pay in insurance premiums.

What contributes to higher rates of past-due medical debt?

Racial inequalities in income and wealth likely play a role in these higher rates of past-due medical debt by making it more difficult for blacks to pay for care.

Wealth isn’t just for the wealthy. Wealth cushions families against costly problems that arise—such as an emergency that leads to an unexpected hospital visit—and gives people the means to move up the economic ladder.

Urban Institute research shows that wealth inequality has not improved over the past 50 years and that lower income and less access to wealth-building vehicles, like homeownership and retirement savings programs, are part of the reason.

We know black people have a higher risk of heart disease, cancer, infant mortality, and lead poisoning. Research also suggests that medical care spending per capita for black people is not greater than spending for whites, so differential ability to pay is likely a key driver of disparities in past-due debt.

Historical and structural factors, such as racial discrimination in hiring and employment and policies like redlining that kept blacks from owning homes have hampered wage growth and wealth accumulation and contributed to segregation that could lead to disparate health outcomes.

Racial differences in insurance coverage also likely play a role. Both black and white nonelderly adults gained insurance following the implementation of the coverage provisions of the Affordable Care Act (ACA). But black adults are nearly one and a half times more likely to be uninsured than white nonelderly adults (17 percent versus 12 percent), making them more likely to experience difficulties paying their medical bills.

Lower rates of health insurance coverage mean people face higher out-of-pocket medical expenses when seeking care, which might also mean fewer visits to the doctor to address medical concerns before they become more serious and more expensive to treat.

Health insurance does not provide full coverage against past-due medical bills (high deductibles and out-of-pocket cost sharing increase the risk), but people with health insurance are less likely to report past-due medical debt.

Current policy proposals to repeal and replace the ACA are projected to leave more people uninsured, which will likely increase the prevalence of past-due medical debt for black adults.

How can we help communities reduce medical debt?

Our research suggests financial knowledge can help. Adults with greater financial knowledge are less likely to have past-due medical debt, even after controlling for health insurance status, disability status, income, and other demographic and socioeconomic factors.

Addressing structural barriers, such as access to quality health insurance and policies to support wealth building, could also go a long way towards improving access and the ability to pay for medical care and strengthening black Americans’ overall financial picture.