Inflation is up and so is medical debt

Inflation and medical debt are on the rise: ©Volgariver - stock.adobe.com

A survey from Debt.com examined the growing burden of medical debt in the United States, with alarming increases reported in key metrics compared to the previous year. The survey, conducted in 2023, highlights the detrimental impact of inflation on Americans' ability to manage their medical expenses.

According to Debt.com's 2023 medical debt survey, 67% of respondents reported that "inflation made it harder to pay medical bills." This marks a substantial increase from the 57% reported in the 2022 survey, showcasing the worsening financial strain faced by individuals and families when it comes to health care costs.

Another revelation from the survey is that nearly one-third (32%) of respondents disclosed that their medical bills had entered collections in 2023, compared to 28% in the previous year. The rise in bills sent to collections signals an escalating problem that could have long-lasting financial repercussions for those affected.

The survey also found that 34% of respondents admitted to "avoiding medical care because of debt," up from 28% in 2022. This suggests that the fear of accruing medical debt is preventing a significant portion of the population from seeking essential health care services, potentially endangering their health.

Debt.com Founder and Chairperson Howard Dvorkin, CPA, expressed his concerns about the worsening situation. "Inflation may be subsiding, but the damage it wrought will stay with us for a long time," said Dvorkin, in a statement. "Medical debt was a growing problem before inflation, even before the pandemic. Now it's becoming a crisis."

The survey also unveiled a shift in the primary sources of medical debt in 2023 compared to previous years. While hospitalization had been a significant contributor to medical debt in 2020, it now ranks lower at 17%, with doctor's visits taking the top spot at 21%. In 2020, hospitalization accounted for 25% of medical debt, while doctor's visits constituted only 15%.

A glimmer of hope in this year's survey is that the overall amount of medical debt is lower than in past years. In 2023, 56% of respondents reported medical debt amounts of less than $500, whereas in 2020, only 20% fell into that category. Additionally, 15% of respondents had medical debt ranging from $1,000 to $5,000 in 2023, compared to 34% in 2020.

Dvorkin attributes these results to the overwhelming financial stress that Americans face, making it increasingly challenging to afford even basic medical care. "Medical debt doesn't exist in a vacuum,” Dvorkin said. “It's quite likely that doctor's visits have become harder to pay because Americans have many other debts they're juggling. Credit card balances are approaching levels not seen in decades, and student loans aren't getting any smaller. Add in regular checkups, and it's a cumulative and pervasive problem."

Dvorkin added that many Americans are unaware of proven methods to alleviate medical debt, such as payment plans and debt settlement. “…They don't know how to handle their medical bills. And that's just not good for their health," he said.

As the nation grapples with the escalating issue of medical debt, experts and advocates are calling for greater awareness of available resources and support to ensure that health care remains accessible to all Americans, regardless of their financial circumstances.