Most past-due medical debt owed to hospitals

A report from the Urban Institute and the Robert Wood Johnson Foundation found that much of the nation’s past-due medical debt is owed to hospitals. According to the report, more than 15% of nonelderly adults in the United States reported past-due medical debt, with 73% owing some or all of that to hospitals.

Among adults who report owing past-due medical debt, 27.9% said they owe all of it to hospitals, while 45.1% own their debt to hospitals and other providers. As for the size of the debt, most adults with past-due medical debt owed at least $1,000, and more than one in five owed at least $5,000. Adults with past-due hospital bills were more likely to have much higher total amounts of medical debt than those with only debt from non-hospital providers, according to the study.

The majority of adults – 60.9% - with past-due hospital bills reported they have been contacted by a collection agency, and individuals with past-due hospital bills with income below 250% of the federal poverty level were no more likely to avoid being referred to collection or receive discounted care when compared to high-income earners, according to the report.

“These findings highlight the persistent challenge of medical debt in America, and the role of hospitals as a key source of that debt,” said Michael Karpman, Urban Institute principal research associate, in a statement. “Understanding the experiences of people with past-due medical bills can inform discussions around new consumer protections to alleviate debt burdens.”

“High rates of medical debt underscore the challenges millions of families and adults—especially families and adults struggling to make ends meet—face trying to pay their medical bills,” said Gina R. Hijjawi, senior program officer at the Robert Wood Johnson Foundation, in a statement. “We see that individuals with disabilities, and Black and Latino adults are disproportionately represented among adults carrying past-due medical debt. Consumers need standards in place that protect them from undue medical debt and help them obtain affordable care.”

The study was based on analysis of data from the June 2022 round of the Urban Institute’s Health Reform Monitoring Survey, a nationally representative survey of adults ages 18 to 64.

According to the researchers, medical debt disproportionately affects underserved populations, such as individuals with incomes below 250% of the federal poverty level. Current federal regulation of hospital payment assistance and debt collection practices stipulate that nonprofit hospitals—which account for nearly 60% of U.S. hospitals—must provide charity care and other community benefits to maintain tax-exempt status. However, these hospitals determine their own charity care eligibility criteria, and financial assistance policies are often difficult to find and understand. Additionally, for-profit hospitals are exempt from these consumer protections.

To read the full report, click here.