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The Impact of Medical Debt on Financial Wellness and Whole Health

Undue Medical Debt

Undue Medical Debt and our partner Neighborhood Trust Financial Partners continue to explore the results of our April 2023 beneficiary survey. Our first brief explained how increasing insurance coverage is not enough to solve the health care affordability crisis — having insurance is crucial in mitigating the harm of medical debt, but insurance itself remains unaffordable for many lower income people. Indeed, while almost all of our respondents reported being insured, 68% still carried medical debt.

Medical debt is different from other types of debt — it’s not the result of an unwise decision or a “frivolous” purchase — it comes from needing to access care in order to live a fuller, healthier life. In our second brief, we explore the impact of medical debt on people’s financial, physical and mental health. What does it mean when people are forced to take on debt in an effort to address their health? And could that debt be keeping them sick? One respondent described the cycle they found themselves trapped in by high healthcare costs, “[t]he overall cost of treatment is overwhelming. I avoid the doctor because I cannot afford the cost, but at times it’s detrimental. Then I end up in the hospital, sometimes for days at a time. I just can’t afford the cost of healthcare.”

Some key takeaways from our survey include:

  • 57% of people with medical debt cut back spending on food, clothing or basic household items in the last two years — for people with more than $2,500 in medical debt, that figure jumped to 70% of respondents,
  • 60% of people with medical debt reported experiencing negative impacts on their mental health, including feelings of isolation and distress, and
  • 39% of respondents said their medical debt impacted their ability to fight their illness.

So, how can we address this crisis? Our second brief, Medical Debt, Money, and Mental Health, explores these difficult statistics while offering pathways to begin to heal both the system and the people within it. Hospitals are the nexus of healthcare access and delivery within their communities, meaning they are also well-positioned to be models in addressing the whole health of a person — from financial well-being to mental health. Solving the problem of medical debt requires collaboration from everyone — providers, billing departments, policymakers, and patients and their families — and a willingness to work towards a collective goal of shifting how we address medical debt and healthcare as a whole. The work is arduous, but if we all work together, we can create a healthcare system that centers the individual and heals rather than harms.

Undue Medical Debt