100 million people in America are saddled with health care debt

Elizabeth and Nick Woodruff of Binghamton, New York, were sued for nearly $10,000 by the hospital where Nick’s infected leg was amputated. (Heather Ainsworth for KHN and NPR)

Credit: Heather Ainsworth

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Elizabeth and Nick Woodruff of Binghamton, New York, were sued for nearly $10,000 by the hospital where Nick’s infected leg was amputated. (Heather Ainsworth for KHN and NPR)

Credit: Heather Ainsworth

The U.S. health system now produces debt on a mass scale, a new investigation shows. Patients face gut-wrenching sacrifices.

Elizabeth Woodruff drained her retirement account and took on three jobs after she and her husband were sued for nearly $10,000 by the New York hospital where his infected leg was amputated.

Ariane Buck, a young father in Arizona who sells health insurance, couldn’t make an appointment with his doctor for a dangerous intestinal infection because the office said he had outstanding bills.

Allyson Ward and her husband loaded up credit cards, borrowed from relatives, and delayed repaying student loans after the premature birth of their twins left them with $80,000 in debt. Ward, a nurse practitioner, took on extra nursing shifts, working days and nights.

“I wanted to be a mom,” she said. “But we had to have the money.”

The three are among more than 100 million people in America ― including 41% of adults ― beset by a health care system that is systematically pushing patients into debt on a mass scale, an investigation by KHN and NPR shows.

The investigation reveals a problem that, despite new attention from the White House and Congress, is far more pervasive than previously reported. That is because much of the debt that patients accrue is hidden as credit card balances, loans from family, or payment plans to hospitals and other medical providers.

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Allyson and Marcus Ward of Chicago moved across the country to be closer to family after the premature birth of their twins, Milo (left) and Theo, left them with about $80,000 in medical debt. (Taylor Glascock for KHN and NPR)

Credit: Taylor Glascock

Allyson and Marcus Ward of Chicago moved across the country to be closer to family after the premature birth of their twins, Milo (left) and Theo, left them with about $80,000 in medical debt. (Taylor Glascock for KHN and NPR)

Credit: Taylor Glascock

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Allyson and Marcus Ward of Chicago moved across the country to be closer to family after the premature birth of their twins, Milo (left) and Theo, left them with about $80,000 in medical debt. (Taylor Glascock for KHN and NPR)

Credit: Taylor Glascock

Credit: Taylor Glascock

To calculate the true extent of this debt, the KHN-NPR investigation draws on a nationwide poll conducted by KFF for this project. The poll was designed to capture bills patients couldn’t afford, as well as other borrowing used to pay for health care. New analyses by the Urban Institute and other research partners also inform the project.

The picture is bleak.

More than half of U.S. adults report that in the past five years they’ve gone into debt because of medical or dental bills, the KFF poll found.

A quarter of adults with health care debt owe more than $5,000. And about 1 in 5 with any amount of debt said they don’t expect to ever pay it off.

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“Debt is no longer just a bug in our system. It is one of the main products,” said Dr. Rishi Manchanda, who has worked with low-income patients in California for more than a decade and served on the board of the nonprofit RIP Medical Debt. “We have a health care system almost perfectly designed to create debt.”

The burden is forcing families to cut spending on food and other essentials. Millions are being driven from their homes or into bankruptcy, the poll found.

Medical debt is piling hardships on people with cancer and other chronic illnesses. Debt levels in U.S. counties with the highest rates of disease can be three or four times what they are in the healthiest counties, according to an Urban Institute analysis.

The debt is deepening racial disparities.

And it is preventing Americans from saving for retirement, investing in their children’s educations, or buying a home.

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Edy Adams of Austin, Texas, was pursued for years by debt collectors over a $130.68 bill for a medical exam she received after being sexually assaulted in Chicago. (Julia Robinson for KHN and NPR)

Credit: Julia Robinson

Edy Adams of Austin, Texas, was pursued for years by debt collectors over a $130.68 bill for a medical exam she received after being sexually assaulted in Chicago. (Julia Robinson for KHN and NPR)

Credit: Julia Robinson

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Edy Adams of Austin, Texas, was pursued for years by debt collectors over a $130.68 bill for a medical exam she received after being sexually assaulted in Chicago. (Julia Robinson for KHN and NPR)

Credit: Julia Robinson

Credit: Julia Robinson

Perhaps most perversely, medical debt is blocking patients from care.

About 1 in 7 people with debt said they’ve been denied access to a hospital, doctor, or other provider because of unpaid bills, according to the poll. An even greater share ― about two-thirds ― have put off care because of cost.

“It’s barbaric,” said Dr. Miriam Atkins, a Georgia oncologist who, like many physicians, said she’s had patients give up treatment for fear of debt.

Patient debt is piling up despite the landmark 2010 Affordable Care Act, which expanded coverage to tens of millions of Americans but did not slow the rise of high-deductible health plans that leave patients with thousands of dollars in bills.

Now hospitals and other medical providers are pushing millions into credit cards and other loans.

Patient debt also sustains a shadowy collections business fed by hospitals that sell debt to collection companies.

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America’s debt crisis is driven by a simple reality: Half of U.S. adults don’t have the cash to cover an unexpected $500 health care bill, the KFF poll showed.

Many simply don’t pay. Medical debt is the most common form of debt on consumer credit records. But the medical debt on credit reports represents only a fraction of the money that Americans owe for health care, the KHN-NPR investigation shows.

  • About 50 million adults ― roughly 1 in 5 ― are paying off bills for their own care or a family member’s through an installment plan with a hospital or other provider, the KFF poll found.
  • One in 10 owe money to a friend or family member who covered their medical or dental bills, another form of borrowing not customarily measured.
  • Still more debt ends up on credit cards, as patients charge their bills and run up balances. About 1 in 6 adults are paying off a medical or dental bill they put on a card.

For many Americans, debt from medical or dental care may be relatively low. About a third owe less than $1,000, the KFF poll found.

But health care debt can be catastrophic.

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Sherrie Foy of Moneta, Virginia, had her retirement plans upended when surgery to remove her colon left her with more than $800,000 in bills and forced her and her husband, Michael, into bankruptcy. (Carlos Bernate for KHN and NPR)

Credit: Carlos Bernate For Kaiser Health

Sherrie Foy of Moneta, Virginia, had her retirement plans upended when surgery to remove her colon left her with more than $800,000 in bills and forced her and her husband, Michael, into bankruptcy. (Carlos Bernate for KHN and NPR)

Credit: Carlos Bernate For Kaiser Health

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Sherrie Foy of Moneta, Virginia, had her retirement plans upended when surgery to remove her colon left her with more than $800,000 in bills and forced her and her husband, Michael, into bankruptcy. (Carlos Bernate for KHN and NPR)

Credit: Carlos Bernate For Kaiser Health

Credit: Carlos Bernate For Kaiser Health

Sherrie Foy, 63, and her husband, Michael, saw their retirement upended when Foy’s colon had to be removed.

After Michael retired from Consolidated Edison in New York, the couple moved to rural Virginia. Sherrie had the space to care for rescued horses.

The couple had diligently saved and had retiree health insurance. But Sherrie’s surgery led to medical bills that passed the $1 million cap on their health plan.

When Foy couldn’t pay more than $775,000 she owed the University of Virginia Health System, the couple declared bankruptcy.

The Foys cashed in a life insurance policy and liquidated savings accounts the couple had created for their grandchildren.

“They took everything we had,” Foy said. “Now we have nothing.”

Diagnosis: Debt in five quick takes

KHN and NPR embarked on a project to understand how widespread medical debt is in America. Here are the most important takeaways of that yearlong investigation:

  • The problem is large. Very large. More than 100 million people, including 41% of adults, are saddled with debt from medical or dental bills, according to a KFF poll conducted for the project. Much of that debt is hidden on credit card balances, in payment plans to hospitals and other medical providers, and through loans patients take out from friends and family. Hospitals, some of them nonprofit or public university systems, often fuel the problem, shuttling patients into loans or selling debt to collection companies.
  • The debt is upending millions of lives. About half of adults with health care debt say they have had to make difficult sacrifices. The most common is cutting spending on food, clothing, and other basic household items. But millions of Americans are also taking on extra work, draining retirement accounts, moving out of their homes, or delaying education for themselves or their children. The debt is deepening racial disparities and preventing patients from getting care.
  • Health care debt is hard to pay off. One in 8 people with health care debt owe $10,000 or more, the KFF poll found. And although most people with debt expect to repay it, 18% say they don’t believe they’ll ever pay it all off.
  • Debt and illness are linked. Debt is more common among low-income and uninsured Americans, but the strongest predictor of whether a community will have high medical debt is how sick its residents are. That’s according to the Urban Institute, which analyzed county-level debt data for this project: In the 100 U.S. counties with the highest levels of chronic disease, nearly a quarter of adults have medical debt on their credit records, compared with fewer than 1 in 10 in the healthiest counties.
  • Patient debt is pervasive for a reason. The KHN-NPR investigation finds that despite more people having health insurance — as a result of the Affordable Care Act — medical debt is pervasive. There is a reason: Over the past two decades, health insurers have shifted costs onto patients through higher deductibles at the same time that the medical industry has steadily raised the prices of drugs, procedures, and treatments. The 2010 health care law didn’t curb that.

About 1 in 8 medically indebted Americans owe $10,000 or more, the KFF poll said.

Americans have been hit particularly hard by the rise of high-deductible health plans, which force people to pay thousands of dollars out of their own pockets before coverage kicks in.

Even Medicare coverage can leave patients on the hook for thousands of dollars, studies show.

About a third of seniors have owed money for care, the poll found. And 37% of these said they or someone in their household have been forced to cut spending on food, clothing, or other essentials.

“They took everything we had. Now we have nothing."

- Sherrie Foy, who declared bankruptcy when she and her husband faced with $775,000 in medical bills

The widespread burden of medical debt has sparked new interest from elected officials, including the White House, which in April announced new initiatives to crack down on debt collectors and track hospital financial aid.

The changes likely won’t address the root causes of this national crisis. “The No. 1 reason, and the No. 2, 3, and 4 reasons, that people go into medical debt is they don’t have the money,” said Alan Cohen, a co-founder of insurer Centivo who has worked in health benefits for decades.

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Samantha and Ariane Buck of Peoria, Arizona, say they were turned away from a physician’s office because of money they owed, forcing them to seek emergency care. They estimate they now have about $50,000 in medical debt. (Ash Ponders for KHN and NPR)

Credit: Ash Ponders for NPR/KHN

Samantha and Ariane Buck of Peoria, Arizona, say they were turned away from a physician’s office because of money they owed, forcing them to seek emergency care. They estimate they now have about $50,000 in medical debt. (Ash Ponders for KHN and NPR)

Credit: Ash Ponders for NPR/KHN

Combined ShapeCaption
Samantha and Ariane Buck of Peoria, Arizona, say they were turned away from a physician’s office because of money they owed, forcing them to seek emergency care. They estimate they now have about $50,000 in medical debt. (Ash Ponders for KHN and NPR)

Credit: Ash Ponders for NPR/KHN

Credit: Ash Ponders for NPR/KHN

Buck, the Arizona father who was denied care, has seen this firsthand while selling Medicare plans to seniors. “I’ve had old people crying on the phone with me,” he said. “It’s horrifying.”

Buck, now 30, recovered from the intestinal infection, but after being forced to go to a hospital emergency room, he was hit with thousands of dollars in medical bills.

Today the Bucks, who have three children, estimate they owe more than $50,000.

“We’ve all had to cut back on everything,” Buck said. The kids wear hand-me-downs. They scrimp on school supplies and rely on family for Christmas gifts. “I feel as if I’ve failed as a parent.”

The couple is preparing to file for bankruptcy.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. KHN is one of the three major operating programs at KFF (Kaiser Family Foundation), a nonprofit organization providing information on health issues.