Past-Due Medical Debt, Financial Knowledge, and Health Insurance

Medical debt can be a significant barrier to financial health. In 2012, nearly 30 percent of nonelderly adults said they had an outstanding, past-due medical bill. Since then, the economy has improved and health insurance coverage has increased, yet past-due medical debt still affects millions of people’s ability to build credit, to get the health care they need, and even to afford basic needs.


This brief provides the first state-level estimates of the share of nonelderly adults reporting medical bills that are past due, drawing on data from the 2012 and 2015 National Financial Capability Study. Past-due medical debt is common: 23.8 percent of nonelderly adults reported past-due medical debt in 2015, down 5.8 percentage points from 2012. Past-due medical debt varies considerably across states in both years, with the highest prevalence found in Southern states. Although health insurance is associated with a reduced likelihood of reporting past-due medical debt, many adults with insurance coverage remain unable to pay their medical bills on time.

Past-Due Medical Debt among Nonelderly Adults, 2012–15

Medical debt is one of the most common forms of debt in collections. Consumers can mitigate this risk, but they need to know about effective strategies. Using the National Financial Capability Study, we estimate that nonelderly adults who answer four or five questions correctly on a five-question financial knowledge quiz are 7 percentage points less likely to have past-due medical debt than similar people who answer zero or one question correctly, even after accounting for differences in health insurance coverage, permanent disability status, and socioeconomic characteristics. Yet, spreading financial knowledge remains a challenge; self-reported financial education as measured in this study is not associated with a reduced likelihood of having past-due medical debt.

Is Financial Knowledge Associated with Past-Due Medical Debt?