Americans are increasingly burdened by medical laws and dental expenses. A mix of unexpected costs from necessary treatments not fully covered by insurance can lead to significant financial strain, sometimes reaching tens of thousands of dollars. The financial repercussions of healthcare extend beyond just doctor’s bills.

Recent studies and federal data highlight the extent of medical debt in the U.S., its impact on family finances, and how patients are coping with these costs.

The magnitude of the crisis

Medical debt remains one of the most pressing financial challenges in the United States. A recent survey by the Kaiser Family Foundation (KFF) indicates that around 41% of adults face some form of medical or dental financial obligation. This includes unpaid balances, charges from providers, and money borrowed from friends and family to cover out-of-pocket costs.

For numerous households, these debts are often substantial and long-term. Census data reveals that nearly 20 million adults owe over $250 due to medical expenses, contributing to a national debt that has reached at least $220 billion. Within this group, roughly 6% borrow over $1,000, while about 1% report owing more than $10,000. A single medical emergency can create enduring financial stress for many families.

Even those with insurance are not spared; out-of-pocket costs are prevalent. The KFF survey shows that 1 in 5 adults are currently working to pay down healthcare bills, and one in four have previously faced bills they struggled to pay. This suggests that medical debts affect people across all age groups, income levels, and types of coverage.

Financial strain beyond medical bills

Medical debt doesn’t just exist in a vacuum. For many, the consequences ripple out beyond clinics and hospitals. Additional KFF data shows that among adults with health-related debts, 41% reported needing to cut back on essentials like food and clothing. Some have even had to delay rent, mortgage, or utility payments just to manage their obligations.

The financial toll extends to long-term stability as well. Some surveys indicate that 40% of respondents had to dip into their savings, use credit cards, or borrow from family to address their healthcare bills.

This cycle can worsen over time. Once families begin borrowing to afford medical costs, debt can become cyclical and challenging to break free from. It’s common for individuals to take on additional loans just to manage interest on existing debts. In fact, medical costs are one of the leading causes of bankruptcy, accounting for up to 66.5% of cases, or about 550,000 annually.

Perhaps most concerning is that debt can influence health decisions. Research indicates that many Americans skip follow-up visits, avoid filling prescriptions, or refrain from recommended procedures due to costs. In essence, what people can afford today directly impacts their access to necessary treatments in the future.

The consequences for credit and opportunities

The effects of medical debt extend beyond managing monthly budgets. Approximately 42% of individuals with unpaid hospital bills find these debts reflected on their credit histories, and nearly a third report that credit scores are negatively impacted.

This decline in credit can create various challenges. A low credit score may restrict access to affordable loans or rental properties. Employers who consider credit reports during hiring may view applicants with debts unfavorably. One hospital visit can thus affect a family’s financial landscape for years.

Recent policy changes aim to relieve some of this burden. Now, medical debts under $500 are automatically excluded from credit reports, generally improving affected individuals’ scores by about 20 points.

Nevertheless, a federal proposal to remove all medical collections from credit reports was blocked recently in court, which would have aided around 15 million Americans in accessing affordable loans.

Emerging borrowing trends for health care

With healthcare costs on the rise, many Americans resort to borrowing to fund treatments. According to the 2024 Gallup-West Health Survey, around 12% of adults, or 31 million people, borrowed money for medical expenses within the year, totaling up to $74 billion. Young adults, women under 50, and families with children are notably more likely to use credit for care.

More healthcare providers are now offering repayment programs. Hospitals and clinics frequently collaborate with third-party companies to enable patients to break large bills into more manageable monthly payments. Referred to as patient funding, these arrangements allow for necessary treatments without the burden of high-interest credit cards.

While patient funding can make emergency care more accessible, it does not remedy the fundamental issues. Healthcare-related debt continues to destabilize finances for millions of families. Even with repayment options, many households are weighed down by medical costs for years.

Policy initiatives at state and federal levels

At the federal level, there are efforts to mitigate long-term impacts. The Consumer Financial Protection Bureau (CFPB) has mandated that credit institutions must exclude medical debt from their reports, limiting lenders’ ability to use this information in decision-making. This change could have alleviated an estimated $49 billion in medical debt from the records of roughly 15 million Americans. However, a federal judge recently ruled against this initiative, claiming the agency exceeded its legal authority.

With federal avenues blocked, some state governments are attempting to address gaps. A 2025 Commonwealth Fund Report indicates that 21 states require financial assistance for hospitals, while 27 mandate community benefit programs. Unfortunately, implementation varies widely. Only six states enforce strict reporting requirements that might flag discriminatory practices or compliance failures.

Some states are introducing stronger regulations. Research from places like Colorado, Maryland, and New Mexico has shown hospitals raising thresholds for free or discounted care and adjusting billing practices to be less aggressive. Nonetheless, loopholes still exist, allowing significant wage garnishments and unstable household situations.

Meanwhile, community efforts and non-profits are stepping in to help individuals most affected. Organizations such as Undue medical debt collaborate with municipal and county relief funds to eliminate substantial medical debts. For example, Connecticut recently utilized $6.5 million in federal COVID-19 aid to wipe out $30 million in debt for approximately 23,000 individuals. Undue’s efforts have resulted in nearly $15 billion in debt relief nationwide.

Medical debt as a nationwide concern

Medical debt continues to significantly impact the lives of millions of Americans, affecting everything from personal finances to credit scores and future healthcare access. The data illustrates the severity of the situation—a collective, multi-billion dollar debt challenging family stability and long-term prospects in housing, education, and employment.

While some repayment tools like state policies, non-profit efforts, and patient financing can assist in managing bills, they only tackle part of the issue. Relief programs can benefit some by eliminating debts, and funding options may make certain treatments more immediately accessible. Yet, the reality is that U.S. healthcare often comes with costs that many families find unmanageable.

The burdens of medical debt are not distributed equitably. Low-income families, communities of color, and young adults report bearing a heavier load.

Although policy changes, new financial options, and community-focused initiatives are starting to provide some relief, the data suggests that the problem is far from resolved. Medical debt is likely to remain a significant challenge for both the healthcare system and the economy in the future.