Increasing Burdens Of Medical Debt And Bankruptcy Are Uniquely American

Forbes contributors publish independent expert analyses and insights. The level and widespread nature of medical debt in the United States is a uniquely American phenomenon, certainly in comparison to the country's peers. It's driven by a combination of factors such as relatively high percentages of people who have no health insurance or high deductibles and co-payments for those who do have health coverage. Medical debt disproportionately impacts low-income, Southern, Black and Hispanic populations. While 100 million Americans have at least some medical debt, about 7.4% of U.S. residents experience catastrophic healthcare expenses annually, more than double the rate of any other developed nation. Here, medical debt is defined as experiencing problems paying or being unable to afford any medical bills in the past 12 months, including those for doctors, dentists, hospitals, therapists, medication, equipment, nursing home or home care. And the term catastrophic is defined as out-of-pocket spending exceeding 40% of a household's income after basic necessities have been met. Further, estimates suggest that inability to afford costs of medical care contributes to at least 530,000 personal bankruptcy filings annually. Approximately two-thirds of personal bankruptcies in the U.S. are associated with medical expenses or illness-related loss of work. Among U.S. peers, medical debt is relatively rare. And in developed countries the number of people who go bankrupt owing to medical debt is practically zero. A series of newly released polling data reveals a growing affordability crisis in healthcare. Published survey data from last year show the impact healthcare costs are having: 29% of Americans delayed taking a vacation, 26% put off medical treatment and 11% skipped meals. The study by West Health-Gallup examined how rising out-of-pocket healthcare costs are affecting Americans. It found that approximately one-third of respondents made at least one trade-off in 2025 to manage to pay for healthcare. One especially poignant example of this is illustrated by nearly 10% of adults saying they postponed their retirement due to healthcare costs. Medical debt is associated with deferred healthcare. Roughly 43% of Americans say they did not take a prescribed medicine because of the out-of-pocket cost to them. And a survey conducted by researchers at the Johns Hopkins Bloomberg School of Public Health found that 42% of people with medical debt delayed dental care compared with 18% of those without, 23% postponed medical care compared with just 5% of those without and 14% of people with medical debt put off mental healthcare compared with 5% of those without. For those in high-cost disease categories, the problem is most acute. An American Cancer Society survey published last year of more than 1,200 cancer patients and survivors found that 51% reported medical debt resulting from cancer treatment despite nearly all of the respondents having insurance. Financial burdens occur across income levels and are most common among people who don't have health insurance. More than 19% of uninsured adults, 13% of adult Medicaid enrollees, 9% of adults with commercial insurance, and 8% of adult Medicare beneficiaries reported medical debt. The comparatively high figure for Medicaid enrollees is conspicuous, as these folks have been accustomed to minimal co-payments for decades. Now they're seeing increases in cost-sharing. Moreover, the problems of rising medical debt and bankruptcies could be worsening, as millions of people are expected to lose health insurance in the coming years as a result of the tax cut legislation President Trump signed in 2025. At the same time, Americans are experiencing substantial increases in health plan premiums in both Affordable Care Act exchange and employer-sponsored markets. To keep premiums affordable, many must switch to higher-deductible plans that will require them to pay (much) more out-of-pocket before their insurance kicks in. What could possibly reinforce this trend is the move by Centers for Medicare and Medicaid Services administrator, Mehmet Oz, to push for the use of high-deductible and other less comprehensive health plans. While this could alleviate the issue of perpetually rising premiums for some, it could also land those who fall ill with greater financial strain. For patients who do end up in debt, they may encounter credit difficulties. Last month, the Trump administration secured permission from a federal court to roll back regulations that would have removed medical debt from consumer credit reports. This could damage the credit standing of many. On top of the current financial burdens for those trying to pay healthcare bills, medical debt can lead to undertreatment in future across a spectrum of health needs for American adults, regardless of the status of their insurance coverage. The implications for health outcomes can be stark, as people facing high financial barriers to care tend to experience poorer physical and mental health and worse mortality rates.