Medical debt in the United States is a major problem. While more than 90% of people have health insurance, many people are uninsured, and even those with insurance may be subject to high deductibles and co-pays. Kaiser Family Foundation (KFF) Analysis Using data from the Survey of Income and Program Participation (SIPP), we found:
…20 million people (nearly 1 in 12 adults) owe medical debt… Americans owe at least $220 billion in medical debt. About 14 million people in the United States (6% of adults) owe more than $1,000 in medical debt, and about 3 million people (1% of adults) owe more than $10,000 in medical debt. While medical debt exists across all demographic groups, people with disabilities or poorer health, low-income earners, and the uninsured are more likely to develop medical debt.
A key policy question, then, is “What happens if we eliminate some or all of the debt?” according to one paper Kruder et al. (2024)the answer is “not much”.
We partnered with RIP Medical Debt to conduct two randomized trials that relieved $169 million in face value medical debt for 83,401 people between 2018 and 2020. There are three sets of results. First, we find no impact of debt relief on the average impact of credit access, utilization, and financial distress. Second, we estimate that debt relief results in modest but statistically significant reductions in payments for existing medical expenses. Third, we find that medical debt relief has no effect on mental health on average but has adverse effects for some groups in a preregistered heterogeneity analysis.
this The New York Times has more coverage This is a perhaps surprising result.
