Patients accrue medical debt not just from a lack of money, but also a lack of understanding

The lack of money is an obvious reason why patients incur health care debt, but in many cases, they don’t pay because they either think their insurance will eventually pay it or that that bill is inaccurate, according to a survey from the Kaiser Family Foundation.

For patients who have health care debt, 67% said that in the past five years, they have not fully paid a medical bill because they lacked the money to pay it. Almost the same percentage (68%) said they haven’t paid a bill because they were expecting their insurance company to pick up the tab, and 44% said they didn’t pay a bill because they didn’t think it was accurate.

Health care debt overall is a challenge for the industry. The survey found that 41% of adults currently have some debt caused by medical or dental bills. Almost a quarter (24%) said they have bills that are past due or unable to pay, 21% are paying bills from a provider over time, one in six say they took out a loan (17%) or used a credit card to pay bills (17%), or borrowed money from friends or family members (10%). Overall, in the last five years, 57% have experienced owing money due to medical or dental bills at some point.

The lower the level of education, the more likely the patient is to say they have current health care debt from medical bills. For those without a college degree, 47% say they have health care debt compared to 31% of college graduates. While those households with less than $40,000 of income say they have medical debt (57%), households earning $90,000 or more also report debt (26%). Higher income households typically have more bank loans or credit card debt, while lower income households report more debts to friends or family.

Nearly half of women say they have debt due to medical bills, compared to about a third of men (48% vs. 34%). Black patients (56%) and Hispanic (50%) adults say they have debt due to medical or dental bills, compared to 37% of White adults. Being insured is no guarantee of avoiding debt. More than four in ten adults with health insurance report current debt.

According to the survey, by age, health care debt peaks among those between the ages of 30 and 49, with 52% in this age group saying they have current health care debt. This is likely related to the fact that about half of people in this age group are parents of children under 18, and parents are significantly more likely than non-parents to report having health care debt from their own or someone else’s medical or dental bills (58% vs. 35%). Over one in five adults ages 65 and over (22%) say they currently owe money due to medical or dental bills. Medicare provides near universal coverage to seniors, but it has gaps that can leave beneficiaries with substantial out-of-pocket costs.

The report notes that health care debt does not have to be enormous for people to have problems paying it off, though some do report owing large amounts. For 56% of respondents, they say they owe less than $2,500, including 16% who say they owe less than $500 and 18% who owe between $500 and $1,000. Nearly half (44%) report owing at least $2,500 due to medical or dental bills, including about one in eight (12%) who say they owe $10,000 or more.

Most (59%) adults with current health care debt think they will be able to pay off their debt within two years, including a third who think they will pay it off within a year. However, nearly one in five (18%) say they don’t think they will ever pay it off. Notably, about one in four Black adults (24%), adults with household incomes under $40,000 (26%), and those who are uninsured (25%) say they don’t think they will ever pay off their health care debt.

The results illustrate how one medical incident can lead to persistent debt, with 72% saying the source of their medical debt was a one-time or short-term medical expense, such as a single hospital visit or treatment for an accident. About a quarter of adults (27%) say their medical debt built up over time, such as treatment for a chronic illness.

Common health care needs such as lab and diagnostic test and doctor’s visits are also common sources of health care debt. Among adults with health care debt, about six in ten (59%) say some of the bills that led to their debt were due to lab fees or diagnostic tests and over half (56%) say bills from doctor visits contributed to their debt. Half of adults with health care debt say bills from emergency care (50%) caused their debt, again highlighting how one-time acute medical events can cause people to fall into health care debt, according to the survey.