March 9, 2022 — Report

An alarming number of consumers struggle with medical bills in the United States, with medical debt representing 58% of all debts in collections. Despite the aims of the Affordable Care Act (“ACA”), medical debt remains a looming crisis, disproportionately affecting Black households and communities.

■ 62% of bankruptcies are related to medical debt
■ 1 in 3 Black adults have past-due medical bills, compared to fewer than 1 in 4
white adults
■ 17% of Black adults lack health insurance compared to 12% of white adults

An array of issues contribute to the current medical debt crisis: rising healthcare costs, lack of insurance, narrow insurance networks, surprise medical bills, high out-of-pocket costs, high deductibles, and inaccessibility of charity care or financial assistance. Unlike other expenses, medical bills often arrive unexpected, sending families spiraling into a financial crisis. The situation worsens as medical bills go unpaid and end up reported to credit bureaus, harming consumer credit scores that increasingly have become important for obtaining employment, housing, and other financial products. As a result, medical debt can lead to long-term financial insecurity.

This report discusses the intersections between the racial health gap and racial wealth gap, “charity care” or hospital financial assistance programs, and the harms of aggressive medical debt collection. This report proposes policy solutions that have come from healthcare advocates, legal aid attorneys, racial justice organizations, academic researchers, and financial protection advocates.