It has long been recognized that medical debt, the leading cause of personal bankruptcy in the US, is a heavy burden for the uninsured. But a new survey reveals that almost a third of workers with job-based insurance also carry substantial medical debt, a rate in line with the average among all working-age Americans and not far behind the 41% of uninsured people in arrears.
The survey also found that 43% of people with coverage through an employer still struggle to pay for healthcare. As a result, almost 30% of these Americans said they frequently skip or delay needed care, compared with 37% of people with individual plans and 58% of those who are uninsured.
Substantial debt was defined in the survey as having at least $2,000 in medical bills to pay off. Regardless of insurance status, those who incurred medical debt attributed it most commonly to treatment for a chronic condition, rather than a catastrophic health emergency.
The report by The Commonwealth Fund, a nonprofit that studies health policy reform, is based on the responses of 6,121 adults between the ages of 19 and 64 surveyed between April and July of this year. A frequently cited study from 2018 by the US Consumer Financial Protection Board (CFPB) estimates that only one in five people carry medical debt, but The Commonwealth Fund said that this calculation is based only on payments made to collection agencies. More than two-thirds of the Commonwealth survey respondents said they are making payments directly to healthcare providers rather than collection agencies.
“While our survey shows that it is much better to have insurance than go without, it also shows that even people with insurance frequently do not have access to affordable care,” said Commonwealth Fund president Joseph Betancourt. “As a physician, I was not shocked at all by these results. Almost every day I see the challenges that patients face. The tough part for me is I rarely have an answer or solution.”
Food, heat, rent—or healthcare
Nearly half of the respondents in the Commonwealth survey said they are paying off bills of $2,000 or more, a figure so substantial that two out of five people with medical debt said they were forced to cut back on necessities such as food, heat, or rent, while a quarter took on another job or started working more hours to pay bills. Among people with employer-based insurance, 43% said it was very or somewhat difficult to afford healthcare, compared with 51% of working-age people overall.
Medical debt has become so prevalent that several states and nonprofits have proposed buying it all up, as the entirety of America’s standing medical debt could be purchased for less than $900 million.
Meanwhile, lawmakers in at least a dozen states and at the federal level are pushing legislation to curtail the financial burden of medical debt. In September the Biden administration proposed new regulations that would remove medical debt from Americans’ credit reports and help families financially recover from medical crises.