A crisis such as injuries from a car crash can quickly land someone in medical debt, even if they have health insurance.
Photo by Deepart386, courtesy iStockphoto
Even with health insurance and a steady job, medical debt followed Marsha Hall for nearly two decades.
After C-section births for all three of her children and several trips to the emergency department, the Greenville, North Carolina, resident faced over $14,000 in debt by 2025, pushing her into never-ending payment plans after failed attempts to settle hospital bills.
“It becomes part of your monthly grind with bills and you don't want to be sent to collections, because my job — you have to do a credit check,” Hall, a 50-year-old finance director, told The Nation's Health. “It would affect my livelihood if I stopped paying it.”
Hall is among the millions of Americans who know what it is like to have looming medical debt. Approximately 14 million people in the U.S., or 6% of adults, have at least $1,000 in medical debt, according to a 2024 KFF Health System Tracker analysis. About 3 million of those people, or 1% of adults, have debts over $10,000.
A crisis such as a car crash, emergency surgery or cancer can quickly land someone in medical debt, even if they have health insurance. In 2025, Americans with medical debt faced a 44% higher risk of housing instability — facing eviction, trouble paying rent or a mortgage — compared to adults without debt, according to a national study of adults published in JAMA Network Open in January. Medical debt also disproportionately affects low-income Americans, the uninsured and mostly Black and brown communities, resulting in lower credit scores that make it harder to be approved for loans or apartment rentals.
The stress from debt can snowball into delayed medical care. Among U.S. adults with depression or anxiety, adults with medical debt were twice as likely to either delay or skip mental health care altogether in the prior year versus adults without debt, according to a 2024 study in JAMA Psychiatry.
“Our work has looked also at credit scores and how they relate to mental health and we have found that people who live in areas with lower median credit scores are more likely to report symptoms of depression and anxiety,” Catherine Ettman, PhD, a co-author on the JAMA Network Open study, told The Nation's Health.
A Consumer Financial Protection Bureau rule established during the Biden administration was intended to wipe out around $49 billion in medical debt from about 15 million Americans' credit reports as of early 2025. At the time, the bureau declared medical debt a poor indicator of someone's ability to pay back a loan. Officials predicted the move would raise credit scores by an average of 20 points and result in the approval of 22,000 more affordable mortgages.
However, the Trump administration blocked the rule in July after siding with a federal District Court lawsuit challenging it. The move triggered a November lawsuit from a debt collection trade group against Colorado over its 2023 state law banning medical debt from credit reports.
“Coloradans with disabilities already face significant barriers in obtaining employment and housing, and so having this protection threatened is a further struggle for folks,” Isabel Cruz, MPP, policy and advocacy director for the Colorado Consumer Health Initiative, told The Nation's Health. “We also know that Coloradans of color report experiencing medical cost burden at a higher rate than white Coloradans.”
The rule's failure is also a blow to cancer patients who face overwhelming costs of long-term treatments and therapies. Stress from the high costs of medical care is known as “financial toxicity,” and the higher it is, the more likely cancer patients will face issues such as emotional distress and poor physical health over time, according to a survey of over 700 patients published in JCO Oncology Practice in June.
“I feel like I talk about finance and insurance regularly with patients in clinic and sometimes it's like the first thing we have to talk about in their visit and I really hate that because I don't want that to be the focus of their care,” study author Austin Wesevich, MD, MPH, MS, told The Nation's Health. “I want the focus of their care to be on treating their leukemia and helping support them psychologically, emotionally, with being a young adult with cancer and having their world flipped over. But their world would be even more flipped over if they're in debt or can't pay their bills.”
While physicians can ask questions to screen patients for financial toxicity, Wesevich said there may not be enough financial care counselors to assist patients or clarity on what to help them with.
A Biden-era policy would have wiped medical debt from credit reports of about 15 million Americans, but the policy was ended.
Photo by DNY59, courtesy iStockphoto
Some of that help can come through hospital financial assistance programs, also known as charity care. A 2025 Commonwealth Fund review of federal and state laws regulating nonprofit hospitals found that 21 states have financial assistance standards and 27 have community benefit standards, which can be a combination of financial, housing and food assistance.
But not all financial assistance programs are equal, and enforcement of patient protections may be lacking. Despite Maryland hospitals being prepaid for charity care, money has not always flowed to patients in need, according to Marceline White, executive director of Economic Action Maryland Fund. Her group is working on expanding eligibility for financial assistance in Maryland hospitals, simplifying the application process and requiring deadlines for when patients should be informed about their options. The group's Medical Debt Freedom Fund also helps Marylanders in need of financial help tackle their debt.
The Economic Action Maryland Fund has also helped advocate for state medical debt legislation, including a law that went into effect in October banning lawsuits against patients with medical debts of $500 or less.
“That's going to mainly help lower income Maryland patients, patients in...majority Black and brown neighborhoods surrounding a lot of our hospitals,” White said.
While states such as Maryland beef up their own medical debt protections, nearly 20 states and cities as well as over 300 health care providers have partnered with the nonprofit Undue Medical Debt to relieve debt burdens across the country.
Formerly known as RIP Medical Debt, the organization buys portfolios of medical debt and wipes them out for people whose debt is 5% or more of their annual income or those who earn at or below 400% of the federal poverty level. Since 2014, Undue Medical Debt has eliminated over $25 billion in medical debt for over 15 million people — including Marsha Hall's debt in 2025.
Counties with the most residents who have multiple chronic conditions such as diabetes or heart disease, tend to have the most medical debt nationally, said Eva Stahl, PhD, MPA, Undue's vice president of policy, engagement and research. Even having health insurance to address those issues does not protect people from medical debt.
“A lot of stories we hear from the people we help are really about inadequacy of health insurance coverage for working families,” Stahl told The Nation's Health. “Even having a high-deductible health plan, which is increasingly the norm of a $5,000 or $10,000 deductible or out-of-pocket max, is going to really harm someone.”
Because insurance was not enough to shield Hall from her medical debt, she encourages people to seek out their hospital's charity care programs for help. She said she is grateful for the extra income to help pay for her oldest daughter's college tuition, but knows there are people delaying their own care because of their debt.
“It affects everybody, the poorest to the richest,” Hall said. “People have surgeries. They have accidents. They have cancer. They have to have treatments. And then that debt, even if you do have means, it's depressing.”
For more information, visit www.cohealthinitiative.org, www.unduemedicaldebt.org and www.econaction.org.
- Copyright The Nation’s Health, American Public Health Association
