Over 20 million Americans have significant medical debts, with almost half owing more than $2,000, according to a new analysis from the Kaiser Family Foundation (KFF).

Millions of Americans have significant medical debt

For the analysis, KFF researchers used data from the 2020 Survey of Income and Program Participation, a nationally representative survey of U.S. households. The survey asked individuals ages 15 and older whether they owed any money for medical bills as of December 2019.

In particular, the researchers examined data from adults ages 18 and older who reported owing more than $250 in medical debt—a threshold the researchers used to define "significant" medical debt compared with people who owe relatively small amounts.

Overall, the researchers found that 23 million people—or almost 1 in 10 adults—in the United States owe significant medical debt. Adults ages 50 to 64 were the most likely to report having significant medical debt at 12%, followed by adults ages 35-49 at 11%. However, the proportion of adults reporting medical debt decreased when people reached Medicare age (65+).

There were also racial differences when it came medical debt. Sixteen percent of Black Americans reported significant medical debt, compared with 9% of white and 4% of Asian Americans.

Women were also more likely to report having medical debt compared with men (11% vs. 8%, respectively). According to the researchers, some of this difference may be related to childbirth expenses and lower average income among women.

In addition, people with more complex health needs, such as those in poor health or with disabilities, were more likely to report significant medical debt. Adults living with a disability were more likely to report medical debt (15%) than those without a disability (7%). Similarly, people who said they were in "fair" or "poor" health were more likely to report owing medical debt than those who said they were in "good," "very good," or "excellent" health.

Of the 23 million adults in the United States who owe significant medical debt, around half owe more than $2,000. In particular, 22% owe between $2,001 and $5,000, 13% owe between $5,001 and $10,000, and 13% owe more than $10,000.

Overall, KFF estimates that U.S. adults had at least $195 billion in medical debt at the end of 2019—much larger than previous estimates using data from credit reports.

How medical debt can affect people's credit

According to the Consumer Financial Protection Bureau (CFPB), medical debt is the most common type of liability on credit reports. In 2021, 58% of all third-party debt collections were for medical debt, a new CFPB report found.

"When it comes to medical bills, Americans are often caught in a doom loop between their medical provider and insurance company," Chopra said. "Our credit reporting system is too often used as a tool to coerce and extort patients into paying medical bills they may not even owe."

As a result, Chopra said the CFPB will be "scrutinizing" the three major credit reporting bureaus—Equifax, Experian, and TransUnion—to ensure they have procedures to verify that medical debt record on credit reports is accurate. These procedures must also include taking action against companies that regularly report inaccurate information.

In addition, CFPB will perform further research into medical billing, collections, and credit reporting to determine whether medical debt should even be included in credit reports. The agency will also collaborate with other federal agencies, such as HHS, to reduce coercive credit reporting that pushes patients into paying more than what they owe. (Rae et al., Kaiser Family Foundation, 3/10; Plescia, Becker's Hospital CFO Report, 3/10; Bannow, Modern Healthcare, 3/1; Sheffey, Insider, 3/1; Carrns, New York Times, 3/4)