Medical debt in collections may appear on a consumer’s credit record for up to seven years, damaging their credit. Adults with medical debt are more likely to forgo needed health care and to have difficulty paying for food and housing costs.
Using deidentified consumer data from one of the major credit bureaus, we assess the prevalence of medical debt in collections in the regions and communities in New York State. This study is part of an initiative to inform strategies for reducing the impact of medical debt on New York residents.
We find the following:
- In New York State, an estimated 6 percent of consumers had medical debt in collections on their credit records in February 2022.
- Medical debt varies considerably across the 10 economic development regions in New York State. The shares of consumers with medical debt range from 3 percent in Long Island and 4 percent in New York City to 14 percent in Central New York.
- In most regions, there are wide disparities in the prevalence of medical debt based on the racial and ethnic composition and median income levels of communities. For example, in Central New York, the rate of medical debt in communities where a majority of residents are people of color is more than twice as high as the rate in communities with the lowest proportions of residents of color (28 percent versus 12 percent).
- In communities in the bottom quartile of median household income (i.e., below approximately $54,200), 9 percent of consumers have medical debt in collections, compared with 3 percent of consumers who live in communities with the highest incomes (above $88,500).
As New York State policymakers consider strategies to reduce the burden of medical debt, the findings presented here show that this burden is distributed unevenly across the state. Efforts to protect patients from medical debt have the potential to reach a broad segment of New York’s population, while reducing regional, racial/ethnic, and socioeconomic inequities in health and financial well-being.