Uninsurance, High Deductible Plans Linked to Greater Medical Debt

The prevalence of medical debt may be tied to health insurance coverage status, as uninsured individuals and those with private high-deductible health plans were more likely to have more medical debt, according to a study published in JAMA Network Open.

Researchers analyzed data from the Census Bureau 2018, 2019, and 2020 Survey of Income and Program Participation (SIPP) to assess health-related and insurance-related risk factors for medical debt. The SIPP gathers monthly data on income and health insurance and annual data on assets, debts, health-related measures, and social determinants of health.

The study sample included over 135,000 individuals. Around half of the sample had private insurance (52.8 percent), 17 percent were covered by Medicare, 15 percent had Medicaid coverage, 5.2 percent had military coverage, and 10 percent were uninsured.

Nearly 11 percent of adults had medical debt, researchers found. Among individuals who provided data for all three years, 19.75 percent reported having medical debt in at least one year. The mean medical debt was $2,306 per adult and $4,671 per household.

Adults in the highest income category had the lowest rates of medical debt, but those in the lowest and middle-income categories had similar rates. Medical debt plagued 12 percent of both adults with incomes below the poverty level and adults with incomes between 300 and 399 percent of the federal poverty level.

Uninsured individuals were the most likely to have medical debt (15.3 percent). However, the study found that having health insurance did not entirely protect against medical debt, as 12 percent of adults with private high-deductible health plans reported having medical debt.

Almost 7 percent of those with military coverage and 7.5 percent of individuals with traditional Medicare plus private coverage reported medical debt. In contrast, adults with Medicare Advantage had the highest likelihood of medical debt among Medicare beneficiaries.

“The protective effect of military and Medicaid coverage – which carry minimal out-of-pocket costs – suggests the salience of comprehensive coverage, a point reinforced by our finding that Medicaid expansion was associated with lower rates of medical debt,” researchers wrote.

Individuals living in states that had not expanded Medicaid were 40 percent more likely to have medical debt than those residing in Medicaid expansion states.

The prevalence of medical debt was associated with higher out-of-pocket spending. For example, in 2019, those with medical debt spent $1,593 out-of-pocket while those without debt paid $818. In addition, adults with medical debt paid more toward premiums than those without debt in 2019 ($1,671 versus $1,337).

Medical debt was also tied to certain social determinants of health. Medical debt was more common among individuals with food or housing insecurity. For example, 52 percent of adults with food insecurity had medical debt compared to 9 percent who did not have food insecurity.

Similarly, 25 percent of people who reported being unable to pay their mortgage or rent had medical debt, compared to 10 percent who did not have this issue.

Individuals who self-rated their health as poor were seven times more likely to have medical debt than those with excellent self-rated health. Hospitalization was also associated with higher odds of having medical debt.

A Peterson-KFF Health System Tracker from March 2022 reinforced that health insurance may not always shield people from medical debt. While 13 percent of people who had been uninsured for over six months had medical debt, 9 percent of people who had been insured for one year also reported medical debt.

Data from Urban Institute also found that uninsurance and high-deductible health plans were associated with greater medical bill problems.