Sick and Broke: How Medical Debt Is Bankrupting American Families

More than 100 million American adults — roughly one in three — are carrying past-due medical bills. Collectively they owe an estimated $220 billion. None of them got here by buying something they couldn’t afford. They got here by getting sick, or by having a child, or by breaking a bone on a Tuesday.

A Bill Nobody Chooses

According to KFF and Consumer Financial Protection Bureau data, Americans are sitting on roughly $220 billion in outstanding medical debt, spread across more than 100 million adults with unpaid medical bills. Unlike a credit card or a car loan, nobody sits down and decides to take this on. It arrives after the fact, itemized on a statement, often for care nobody had the option to shop around for while it was happening.

Insurance is supposed to be the buffer, and increasingly it isn’t enough of one. The average deductible on a mid-tier ACA marketplace plan for 2026 runs $5,304, and $7,186 for the cheapest bronze tier. That is real money a household has to produce before coverage meaningfully kicks in — and it is a large part of why medical debt shows up in insured households almost as often as uninsured ones.

Coverage Doesn’t Mean Protection

The uninsured rate itself has held roughly flat, at 8.3 percent of all Americans — about 28 million people — according to the CDC’s 2025 National Health Interview Survey, with the working-age rate closer to 11.6 percent. The burden is not evenly spread: 21.9 percent of Hispanic adults ages 18 to 64 lack coverage, compared with 11.3 percent of Black adults, 8.5 percent of white adults, and 4.9 percent of Asian adults. Adults in states that never expanded Medicaid are uninsured at nearly double the rate of those in expansion states — 18.1 percent versus 9.0 percent.

The trend line is not encouraging. The Congressional Budget Office projects more than 14 million additional Americans will be uninsured by 2034, driven by the scheduled expiration of enhanced ACA marketplace subsidies and tightened Medicaid eligibility rules working their way through federal policy. Whichever party gets credit or blame for the specifics, the net effect on families is the same: more people one diagnosis away from a bill they cannot pay.

From Hospital Bill to Credit Report

Medical debt behaves differently than other debt once it hits collections, and the scale is striking. The Urban Institute has found that medical bills account for 58 percent of all debt currently in collections nationally. As of August 2024, nearly 10 million consumers still had medical collections showing on their credit reports, according to CFPB data. Academic research published in the American Journal of Public Health has found medical issues implicated in roughly two-thirds of personal bankruptcies — 66.5 percent — a figure that predates the steep post-pandemic rise in health care costs and, if anything, likely understates today’s reality.

Regulators have tried to soften the credit-report damage. The three major credit bureaus voluntarily stripped roughly 70 percent of medical collections from reports in 2022, and the CFPB finalized a rule in January 2025 to remove medical debt from credit reports entirely. A federal judge overturned that rule in July 2025. So the protection families were promised is, for now, back in legal limbo — a reminder that policy fixes for this problem have a way of arriving and then evaporating.

“A medical bill is the only debt in America you can accumulate while unconscious.”

The Domino Effect

Medical debt rarely stays contained to a hospital ledger. Recent research tracking families over time found that a medical debt exposure was associated with a 7-percentage-point increase in the probability of housing instability the following year — missed rent, forced moves, eviction risk. That connects directly to the housing cost-burden numbers this Index tracks elsewhere: a bill for an ER visit can be the difference between a family staying current on rent and falling behind for good.

Getting sick in America carries a financial risk that most peer nations simply designed out of their systems decades ago. The Moral Decay Index tracks medical debt not to score political points, but because a health system that can bankrupt the people it treats is a system worth watching closely — and honestly.