Brief Medical Debt Fell during the Pandemic. How Can the Decline Be Sustained?
Michael Karpman, Kassandra Martinchek, Breno Braga
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In this brief, we examine the prevalence of medical debt and provide the first national estimates of changes in the share of adults with medical debt following the onset of the COVID-19 pandemic.  Using data from the Urban Institute’s Health Reform Monitoring Survey and a nationally representative panel of deidentified, consumer-level records from a major credit bureau, we find the following:

  • After holding steady in the years before the pandemic, the shares of adults with medical debt, problems paying medical bills, and medical debt in collections have declined since the pandemic began. Between March 2019 and April 2021, the share of nonelderly adults reporting medical debt declined from 23.6 to 16.8 percent and the share reporting problems paying family medical bills in the past 12 months fell from 17.0 to 12.2 percent. The share of adults with credit records who have medical debt in collections fell from 15.3 percent in February 2020 to 13.9 percent in August 2021.
  • The share of adults with medical debt in collections is highest among those ages 25 to 34, at 18.0 percent in August 2021. Adults ages 65 and older were the least likely to have medical debt in collections (7.8 percent), followed by adults ages 18 to 24 (11.2 percent). Adults in all age ranges have experienced reductions in both self-reported medical debt and medical debt in collections since the pandemic began.
  • Though medical debt declined across racial and ethnic groups, inequities persisted in 2021. Black adults continued to report the highest rate of medical debt in April 2021, at 22.5 percent, compared with 19.9 percent of Hispanic/Latinx adults and 15.5 percent of white adults. The share of adults with medical debt in collections in August 2021 was highest in majority-Black communities (22.7 percent), followed by majority–American Indian/Alaska Native communities (17.7 percent) and majority-Hispanic/Latinx communities (16.0 percent). Majority-white communities had the lowest share of adults with medical debt in collections (12.6 percent).

The risk of acquiring medical debt may increase again when health care use rebounds to prepandemic levels and the provisions of federal pandemic relief legislation expire.  New health insurance reforms and other policies could sustain the recent decline in medical debt, further reduce its prevalence, and reduce disparities by race, ethnicity, and age. These policies include closing the Medicaid coverage gap in states that have not adopted the Affordable Care Act Medicaid expansion, extending enhanced subsidies for Marketplace plans and lowering cost-sharing requirements, making subsidized Marketplace plans available to more people with access to employer-based coverage, and strengthening the regulation of hospital financial assistance and debt collection practices.

Research Areas Wealth and financial well-being Health and health care Race and equity
Tags Asset and debts Economic well-being Family credit and debt Financial stability Health equity Opportunity and ownership Racial inequities in health Racial wealth gap Social determinants of health COVID-19
Policy Centers Health Policy Center Center on Labor, Human Services, and Population
Research Methods Data analysis Data collection Quantitative data analysis