Dive Brief:

• One-third of adults with private insurance are contending with medical debt, according to a new survey, showing how healthcare coverage isn't a guarantee of protection from financial devastation.
• About 37% of those with medical debt drained all or or part of their savings to pay their bills, and 30% delayed necessary care, according to the survey released Thursday by the Commonwealth Fund. Another 30% reported cutting back on food, heat or rent to make ends meet.
• Researchers with the healthcare foundation urged policymakers to consider banning medical debt from credit reports nationwide or address factors that drive up debt by eliminating deductibles in commercial insurance plans or capping provider payment rates.

Dive Insight:

Research shows that uninsured adults still bear the brunt of medical debt. More than six in 10 uninsured adults under 65 report having medical debt, compared with four in 10 adults with insurance. Uninsured adults are also almost twice as likely to say affording healthcare is difficult.

But the Commonwealth Fund’s report underscores that medical debt is also rampant among insured people seeking basic care, according to Sara Collins, a senior scholar at the Commonwealth Fund and co-author of the study.

“Medical debt is often viewed as a problem limited to people who are uninsured or who face a major medical emergency. But this survey shows that it is also widespread among Americans with private insurance,” Collins said in a statement. “When insured people are left owing thousands of dollars for their care, coverage is falling short of its most basic purpose: protecting people financially when they get sick.”

And insured people with medical debt typically have a lot of it, according to the study of more than 6,300 working-age adults.

Nearly half of the adults who have medical debt are shouldering $2,000 or more – an estimated 15% of all U.S. adults between ages 19 and 64 with private insurance, the Commonwealth Fund said.

Hospital care – one of the largest drivers of U.S. healthcare spending – was the primary source of people’s medical debt, with nearly two-thirds of adults with debt attributing it to care received in hospitals. Other settings also contributed, with 43%, 38% and 25% of people with medical debt reporting it resulted from doctor’s offices, lab work and dental care, respectively.

Almost 65% of respondents to the Commonwealth Fund’s survey blamed their insurance company for their medical debt, while 57% blamed the healthcare system writ large. Others blame providers, the government and themselves.

There are measures that policymakers and health systems could take to help alleviate the burden of medical debt, the Commonwealth Fund suggested. Potential solutions include interest-free payment plans, more financial assistance from hospitals and removing medical debt from consumer credit reports, a measure that passed during the tail end of the Biden administration but was struck down after President Donald Trump took office.

Sixteen states have prohibited medical debt from appearing on credit reports, but they vary in scope. As of 2023, the three major credit reporting agencies —  Equifax, Experian, and TransUnion — have limited the amount of medical debt on credit reports, though anything above $500 is still included.

The U.S. medical debt problem is expected to worsen in the coming years as healthcare prices continue to rise and more Americans become uninsured as a result of cuts to Medicaid and the Affordable Care Act.

Congress should reconsider the policy changes and put the U.S. on a “path to universal coverage,” the Commonwealth Fund wrote.