New research from the Peterson Center on Health Care and the Kaiser Family Foundation finds that Americans are now holding at least $195 billion in medical debt. Nine in ten of them have health insurance. Emergency care, COVID-19 care and mental health care are the three biggest causes.
Three million Americans owe more than $10,000 in medical debt, and 16 million Americans owe more than $1,000. Not surprisingly, the most vulnerable Americans face the greatest debt. Researchers say that “Medical debt can happen to almost anyone in the United States, but this debt is most pronounced among people who are already struggling with poor health, financial insecurity, or both,”
In a separate survey of 1,250 people, researchers found that more than half (55 percent) say they have some medical debt. And, almost half of these people report not being able to purchase a home or put money aside for retirement as a result.
Nearly seven in 10 people (69 percent) who purchase their own health insurance have medical debt and just over six in ten (61 percent) who have employer coverage have medical debt. Just under six in ten (59 percent) without health insurance report having medical debt.
People with health insurance appear to have the same rate of medical debt as people without health insurance. But having health insurance limits the amount of debt people have. Health insurance deductibles have sky-rocketed over the last several years, presenting a barrier to care for many Americans. They are also a driver of medical debt.
Employer plan deductibles average $1,669 in 2022 for people who work for large employers. People working in companies with fewer than 200 workers face even higher average deductibles, $2,379. And, individuals with state health insurance exchange plans and no subsidies faced average deductibles of $4,364 in 2020.
Total average out-of-pocket costs for health care are now $12,530. That includes premiums, deductibles and copays. And, it represents about 20 percent of the typical person’s annual income, $67,521 in 2020.
People not yet eligible for Medicare, with incomes between 100 and 400 percent of the federal poverty level, are entitled to subsidies on health insurance through the state health insurance exchanges, which can bring down their health care costs significantly. People with Medicare with low incomes are also eligible for government assistance paying premiums, deductibles and coinsurance, through Medicaid and Medicare Savings Programs.
To minimize your costs, plan ahead. If you have Medicare, to save money, make sure you have the number of the local ambulance that takes Medicare on your phone and your refrigerator. If you’re in a Medicare Advantage plan, have the number of an in-network ambulance.
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