Consumers Feel the Pinch of Medical Debt, Skip Healthcare Access

The problem of medical debt is getting worse, with new Debt.com data showing that inflation and rising medical costs are putting patients in a sticky financial situation and leaving about a third without access to care.

The survey of nearly 1,000 US healthcare consumers showed that the rising cost of not just medical care but of nearly all consumer goods is putting pressure on patients as they navigate healthcare. With less money to go around, the nation’s inflation rate is leaving some patients to forego care while others face dire financial straits, the survey said.

Overall, about two-thirds (67 percent) of respondents said the nation’s inflation woes made it harder for them to pay their medical bills this year. That’s up from 57 percent of patients who said the same in 2022. Around three in 10 (32 percent) said their medical bills were in collections, up from 28 percent whose bills were in collections last year.

Healthcare affordability problems are turning into healthcare access problems, the survey furthered. Of the 1,000 patient respondents, 34 percent said they have been avoiding their medical care because of medical debt. Only 28 percent said the same thing in 2022.

"Inflation may be subsiding, but the damage it wrought will stay with us for a long time," Debt.com founder and chairperson Howard Dvorkin, CPA, said in a press release. "Medical debt was a growing problem before inflation, even before the pandemic. Now it's becoming a crisis."

Notably, the survey showed that medical debt now stems from an unusual source: doctor visits. Whereas in the past, medical debt cropped up from infamously expensive encounters, like emergency room visits or hospitalizations, doctor visits now account for the bulk of medical debt.

According to the survey, 17 percent of medical debt came from hospitalizations and ED visits; 21 percent came from a doctor’s visit. This is different from 2020 when 15 percent of medical debt stemmed from doctor’s visits and 25 percent from hospitalizations.

Other sources of medical debt in 2023 included diagnostic tests (15 percent), dental care (11 percent), outpatient services (10 percent), prescription drugs (7 percent) and nursing home/long-term care (1 percent).

There was one potentially bright spot in the Debt.com survey: the amount of debt consumers carry is going down.

In 2023, 56 percent of patients held less than$500 in medical debt, while 15 percent held between $1,000 and $5,000 in medical debt. That compares to 2020, when only 20 percent of people had medical debt as low as $500 or less, and a whopping 34 percent had medical debt between $1,000 and $5,000.

But that good news might be a double-edged sword, Dvorkin indicated. Medical debt may be low, he said, but that might be because consumers aren’t accessing healthcare anymore.

"Medical debt doesn't exist in a vacuum. It's quite likely that doctor's visits have become harder to pay because Americans have many other debts they're juggling,” Dvorkin explained. “Credit card balances are approaching levels not seen in decades, and student loans aren't getting any smaller. Add in regular checkups, and it's a cumulative and pervasive problem."

The financial stress that inflation caused was predictable, with other research firms detecting issues with healthcare access at the hands of the nation’s financial problems.

In October 2022, experts from Nationwide Retirement Institute reported that one in 10 patients found that inflation exacerbated healthcare affordability and access issues.

In the past 12 months, 14 percent of the 1,140 people surveyed by Harris Poll said they canceled or postponed plans to see a healthcare specialist. One in 10 respondents said they canceled or postponed plans to take a prescribed medication or get their annual physical (11 percent), the survey added.

And, as is common in nearly every aspect of healthcare, there are racial disparities at play.

An August 2022 report from NPR, the Harvard T.H. Chan School of Public Health, and the Robert Wood Johnson Foundation showed that patients of color felt the pinch of inflation more than their White counterparts.

One in four American Indian/Alaska Native (AI/AN) people said they are having serious problems affording medical care or prescription drugs, followed by 22 percent of Black people who said the same. Around one in five (19 percent) of Latino people said they were having serious problems affording medical care or prescription drugs.

That all compares to just 16 percent of White people experiencing the same issues. Among Asian respondents, 14 percent said costs are problematic.

To add insult to injury, respondents indicated that inflation was also making it harder for them to access other consumer goods, like groceries, or pay bills, like rent or a mortgage. This directly impacts key social determinants of health, the NPR, Harvard, and RWJF researchers said.

“Even though there are many programs aimed to help families with food costs, much higher rates of Black, Latino, and Native American households currently say they are facing serious problems affording food,” Mary Findling, assistant director of the Harvard Opinion Research Program at the Harvard T.H. Chan School of Public Health, said in a press release. “This is likely to have major immediate and longer-term health consequences for millions of families.”