Medical debt is one of the most prevalent types of consumer debt. 13% of Oregon residents in
predominantly white zip codes have one or more medical debts in collection on their credit
reports, increasing to 15% for residents of predominantly non-white zip codes. Among U.S.
consumers, 52% of collection items on credit reports are for medical debts. Medical debt is
correlated with the use of payday loans and is frequently cited as a leading cause of bankruptcy
filings.
Medical debt is different from many other types of consumer debt—people do not plan to get
sick or get hurt, and health care services are not only necessary, but can be a matter of life or
death. Also, medical bills often end up in collections because of insurance or billing disputes, or
other problems that arise from having a third party payor involved in the payment of bills. In
many cases, high medical bills are simply unaffordable for low-income and moderate-income
families.