Medical Debt in the US, 2009-2020

Abstract

Importance: Medical debt is an increasing concern in the US, yet there is limited understanding of the amount and distribution of medical debt, and its association with health care policies.

Objective: To measure the amount of medical debt nationally and by geographic region and income group and its association with Medicaid expansion under the Affordable Care Act.

Design, setting, and participants: Data on medical debt in collections were obtained from a nationally representative 10% panel of consumer credit reports between January 2009 and June 2020 (reflecting care provided prior to the COVID-19 pandemic). Income data were obtained from the 2014-2018 American Community Survey. The sample consisted of 4.1 billion person-month observations (nearly 40 million unique individuals). These data were used to estimate the amount of medical debt (nationally and by geographic region and zip code income decile) and to examine the association between Medicaid expansion and medical debt (overall and by income group).

Exposures: Geographic region (US Census region), income group (zip code income decile), and state Medicaid expansion status.

Main outcomes and measures: The stock (all unpaid debt listed on credit reports) and flow (new debt listed on credit reports during the preceding 12 months) of medical debt in collections that can be collected on by debt collectors.

Results: In June 2020, an estimated 17.8% of individuals had medical debt (13.0% accrued debt during the prior year), and the mean amount was $429 ($311 accrued during the prior year). The mean stock of medical debt was highest in the South and lowest in the Northeast ($616 vs $167; difference, $448 [95% CI, $435-$462]) and higher in poor than in rich zip code income deciles ($677 vs $126; difference, $551 [95% CI, $520-$581]). Between 2013 and 2020, the states that expanded Medicaid in 2014 experienced a decline in the mean flow of medical debt that was 34.0 percentage points (95% CI, 18.5-49.4 percentage points) greater (from $330 to $175) than the states that did not expand Medicaid (from $613 to $550). In the expansion states, the gap in the mean flow of medical debt between the lowest and highest zip code income deciles decreased by $145 (95% CI, $95-$194) while the gap increased by $218 (95% CI, $163-$273) in the nonexpansion states.

Conclusions and relevance: This study provides an estimate of the amount of medical debt in collections in the US based on consumer credit reports from January 2009 to June 2020, reflecting care delivered prior to the COVID-19 pandemic, and suggests that the amount of medical debt was highest among individuals living in the South and in lower-income communities. However, further study is needed regarding debt related to COVID-19.

Figure 1.. Stock and Flow of Medical and Nonmedical Debt in Collections by Year

Figure 2.. Stock of Medical Debt by County and Zip Code Income Decile

B, The dots are means, the black horizontal lines are medians, the boxes are the interquartile ranges, and the whiskers are the range (10-90) for stock by zip code income decile as of June 2020. The zip codes were assigned to income deciles using per-capita income estimates from the 5-year American Community Survey (2014-2018), weighting each zip code by its population in the American Community Survey. The median number of zip codes in each income decile was 3474 (interquartile range, 2398-3762) in 2020.

Figure 3.. Trends in Medical and Nonmedical Debt in Collections by Medicaid Expansion Status

The plots show the flow of mean medical and nonmedical debt in collections, grouping states by Medicaid expansion status and normalizing values for each group to 1 in 2013 (eg, the normalized value for 2020 is calculated as the ratio of the unnormalized 2020 and 2013 values for that group). Values are from June of each year. The vertical line indicates the timing of initial Medicaid expansion.

Figure 4.. Flow of Medical Debt by State Medicaid Expansion Status and Zip Code Income Decile in 2009 and 2020

The dots are means, the black horizontal lines are medians, the boxes are the interquartile ranges, and whiskers are the 10 to 90 range for flow of zip code level medical debt by zip code income decile as of June 2020. To maintain consistent income deciles across expansion and nonexpansion states, zip codes were assigned income deciles based on their population-weighted rank in the national distribution. The median number of zip codes in each income decile was 3474 (interquartile range, 2396-3764) in 2009 and 3474 (interquartile range, 2398-3762) in 2020.