The scale of medical debt in the United States
Roughly one in five American adults — somewhere between 40 and 50 million people — carry medical debt that appears on their credit report or has been sent to a collection agency. That figure comes from surveys by the Consumer Financial Protection Bureau, the Federal Reserve, and nonprofit research groups that track debt patterns. The actual number of people with any unpaid medical bills is higher, because it includes people still negotiating with providers or hospitals and those who have not yet been reported to credit bureaus.
Medical debt is the single largest source of debt sent to collections in the United States. It accounts for more collection cases than credit card debt, auto loans, or personal loans. Unlike other forms of debt, medical debt often arrives unexpectedly — a person can have insurance, follow their plan, and still receive a bill they cannot pay because of how their coverage was applied or what the provider charged.
The amount owed varies widely. Some people carry a few hundred dollars from a single visit; others owe tens of thousands from hospitalizations, surgeries, or ongoing treatment. The median amount is typically in the range of $500 to $2,500 per person, though this varies by region, type of care, and whether the person had insurance at the time of service.
Key Takeaways
- Between 40 and 50 million American adults have medical debt on their credit report or in collections, based on federal surveys and nonprofit research.
- Medical debt is the largest source of debt sent to collections, ahead of credit cards and personal loans.
- People with insurance can still end up with medical debt if their plan does not cover the full bill or if they receive an out-of-network charge.
- Medical debt affects credit scores and can lead to wage garnishment or bank account levies if the debt goes unpaid for several years.
- Some states and the federal government have rules limiting how medical debt can be reported or collected, though protections vary by location.
Who carries medical debt and why
Medical debt is not limited to uninsured people. Studies show that roughly 45 percent of people with medical debt had health insurance at the time they received the care. High-deductible plans, narrow networks, and surprise billing — when an out-of-network provider treats you at an in-network facility — are common reasons insured people end up with bills they cannot pay.
People in lower-income households are more likely to carry medical debt, but it appears across all income levels. A person earning $75,000 a year can face medical debt after a major surgery or a hospitalization that exhausts their savings. Age also matters: adults between 45 and 64 carry medical debt at higher rates than younger adults, partly because they are more likely to need hospital care and partly because they have less time to recover financially before retirement.
Chronic illness and ongoing treatment create persistent medical debt. Someone managing diabetes, cancer, or heart disease may accumulate bills over months or years, even if they are insured. A single emergency — a car accident, a fall, a sudden illness — can create thousands of dollars in debt in a matter of days.
How medical debt appears on credit reports
Medical debt typically reaches a credit report only after it has been unpaid for 180 days (six months) and sent to a collection agency. The hospital or provider's billing department does not report to credit bureaus directly; a third-party collector does. This means you may have time to negotiate with the provider or find a payment plan before the debt shows up on your credit file.
Once a collection agency reports the debt, it can stay on your credit report for seven years from the date of first delinquency — the date you first missed a payment, not the date the collector bought the debt. A medical collection account can lower your credit score by 50 to 100 points or more, depending on your starting score and how many other negative marks are on your report.
In 2023, the three major credit bureaus (Equifax, Experian, and TransUnion) began removing paid medical debt from credit reports. However, unpaid medical debt still appears and still affects your score. Some states have also passed laws limiting how medical debt can be reported or collected, though these rules vary significantly by location.
The difference between medical debt and other consumer debt
Medical debt behaves differently from credit card debt or personal loans in several ways. First, the amount is often not negotiable — a hospital bill reflects what the provider charged, and while you can dispute the charges or ask for financial hardship consideration, you cannot simply refuse to pay a lower amount the way you might with a credit card company.
Second, medical debt often arrives without warning. You do not choose to take on medical debt the way you choose to open a credit card. This unpredictability makes it harder for people to budget or plan to avoid it.
Third, some states have rules that protect medical debt differently than other consumer debt. A few states limit wage garnishment for medical debt, and some have passed laws preventing medical debt from being reported to credit bureaus at all. Federal law also limits how much of your wages can be garnished for any debt, but the rules are complex and vary by state.
Medical debt and your financial options
If you have medical debt, several paths exist depending on the amount owed and your situation. Negotiating directly with the provider's billing department before the debt goes to collections is often the fastest route. Hospitals and large providers frequently have financial assistance programs or can set up payment plans without involving a collector.
If the debt has already gone to a collection agency, you can still negotiate. Collectors often buy medical debt for a fraction of what is owed and may accept a settlement for less than the full amount. Putting any settlement agreement in writing is important — a verbal agreement is not enforceable.
Some people use credit counseling services or debt management plans, though these are not specific to medical debt and may not be the best fit. Others explore whether they may have access to for hospital financial hardship programs, which can reduce or eliminate bills based on income.
State and federal rules that limit medical debt collection
Federal law sets a baseline for debt collection: collectors cannot harass you, cannot call before 8 a.m. or after 9 p.m., and cannot contact you at work if your employer forbids it. These rules apply to medical debt collectors the same way they apply to any other collector.
Some states have gone further. A handful of states have passed laws preventing medical debt from being reported to credit bureaus at all, or requiring longer waiting periods before reporting. A few states also limit wage garnishment for medical debt more strictly than federal law does. These protections vary significantly by state, so the rules in your location may be quite different from those in a neighboring state.
At the federal level, the Consumer Financial Protection Bureau has been investigating medical debt collection practices and has taken action against some collectors for violating debt collection laws. However, enforcement is ongoing and varies by region.
Frequently Asked Questions
Can medical debt be forgiven or written off?
Hospitals and providers can write off medical debt, and many do for patients who cannot pay. This is called a financial hardship write-off or charity care. You typically have to ask and provide proof of income or financial hardship. Debt that has already gone to a collection agency is less likely to be written off, but you can still try to negotiate a settlement or payment plan with the collector.
Does medical debt affect my ability to get a mortgage or car loan?
Yes. Medical debt on your credit report lowers your credit score, which affects the interest rate you are offered and whether you are approved at all. A lender may also see unpaid medical debt as a sign that you are struggling financially. However, some lenders weight medical debt less heavily than other types of debt, so it is worth shopping around.
What happens if I ignore medical debt?
If you ignore medical debt for several years, the collector can sue you in court. If they win, they can garnish your wages or levy your bank account. The exact process depends on your state's laws. However, ignoring the debt also means it stays on your credit report and continues to damage your score, so taking some action — even if it is just calling to negotiate — is usually better than doing nothing.
Is medical debt treated differently in bankruptcy?
Medical debt is treated like any other unsecured debt in bankruptcy. It can be discharged (eliminated) in Chapter 7 bankruptcy or included in a repayment plan in Chapter 13 bankruptcy. However, bankruptcy has serious long-term effects on your credit and finances, so it is usually a last resort after other options have been exhausted.
Can I be sued for medical debt?
Yes. If medical debt goes unpaid for long enough — typically three to six years depending on your state — the collector can file a lawsuit. If they win, they can garnish your wages or place a lien on your property. Some states have shorter or longer time limits for suing, and a few have stronger protections against wage garnishment for medical debt specifically.