Medical Debt
Unpaid healthcare bills that represent a major source of financial hardship and personal bankruptcy in the US.
What is Medical Debt?
Medical debt refers to money owed to healthcare providers — hospitals, physicians, labs, or insurers — for services received. It is the leading cause of personal bankruptcy filings in the United States and affects an estimated 100 million Americans. Medical debt can arise from unexpected emergencies, chronic illness, underinsurance, or surprise billing from out-of-network providers. Key consumer protections include the No Surprises Act (2022), which limits balance billing in emergency situations, and CFPB rules (effective 2025) removing medical debt from credit reports. Hospitals receiving federal funding must provide financial assistance programs (charity care) for low-income patients.
Example
A patient without insurance who receives emergency appendix surgery may face a hospital bill of $30,000–$50,000. If the patient qualifies for the hospital's charity care program, the bill may be reduced or eliminated. If not, unpaid medical debt is sent to collections, historically appearing on credit reports and damaging credit scores — though this practice is being phased out under new CFPB rules.