A significant portion of U.S. adults have some past-due medical debt, according to a recent study, and the majority of those with debt owe non-profit hospitals.
The findings underscore the contradiction of non-profit hospitals in the U.S. Non-profit hospitals determine their own criteria for charity care, and financial assistance is often difficult to find and understand.
That’s according to the Urban Institute, which found more than 15.4% of U.S. adults owe past-due medical debt. Having past-due medical debt can have negative outcomes on patients because they may forgo healthcare in the future or struggle to pay for other basic needs, such as food and housing. For this reason, as well as the potential for medical debt to harm credit and create other financial hardships, hospital billing and collection practices are increasingly coming under the spotlight.
Of adults who owe past-due medical debt, nearly 73% owe some or all of that debt to hospitals. In fact, 27.9% said they owe all of their debt to hospitals, while 45.1% owe their debt to hospitals and other providers.
The findings stem from June 2022 data from a nationally representative sample of adults ages 18 to 64 who participated in the Urban Institute’s Health Reform Monitoring Survey. The survey focused on the experiences of adults with family incomes below and above 250% of the federal poverty level, which is often used as the income cutoff used by many hospitals to determine eligibility for free and discounted care.
Nearly 61% of adults who owed medical debt said that a collection agency contacted them about the debt. Another 5.2% said the hospitals filed a lawsuit against them, while 3.9% reported garnished wages and 1.9% seized funds from a bank account.
Different demographics were more likely to owe medical debt than others. For instance, adults with disabilities (29.5%) were more than twice as likely as those without disabilities (12.5%) to report past-due medical debt. Black (25.9%) and Latino (19.1%) adults were more likely to report past-due medical debt than White (12.8%) adults.
“The persistence of medical debt highlights the ongoing challenges families face in obtaining affordable healthcare, including high prices for services, gaps in access to health insurance coverage, and inadequate protection against out-of-pocket costs for many people with high-deductible insurance plans,” the study found. “The concentration of past-due medical debt among families with low incomes and the large share who owe a portion of that debt to hospitals suggests that expanded access to hospital charity care and stronger consumer protections could complement coverage expansions and other efforts to mitigate the impact of unaffordable medical bills.”
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."