Medical debt is a widespread problem in the United States. Some policymakers are paying attention and, Potential Campaign IssuesAccording to a 2022 KFF survey, two in five U.S. adults of all ages (41%) report having some sort of debt from their own or someone else’s medical or dental expenses. Nearly three-quarters of adults say they’re worried about the cost of unexpected medical bills or health care services, a higher percentage than those who say they’re worried about other household expenses. The Medicare program, which provides health insurance to 66 million people (most of whom are seniors age 65 or older), helps cover the medical costs of those who qualify, but problems related to medical expenses are not uncommon among Medicare-age adults, and many Struggling with debtThis could have significant long-term health and economic consequences.
While Medicare provides insurance coverage for a wide range of health care services, including hospitalization, doctor visits, prescription drugs, and post-acute care, Medicare recipients typically pay out-of-pocket costs for monthly premiums and deductibles, cost-sharing for services covered by Medicare, and services not covered by Medicare, such as dental, vision, and hearing care, and long-term services and supports. Medicare households have higher health care costs than other households and spend a larger share of their household budgets on health care and insurance premiums. Health care costs are a particular challenge for millions of Medicare recipients who have limited income and savings to cover unexpected medical and other expenses. Finally, older adults are more likely than younger adults to suffer from cognitive impairments, such as Alzheimer’s disease, which accounts for about 10 percent of health care spending. Shown to contribute to lower credit scores and financial instability Years before the disease was diagnosed.
In this data note, KFF Medical Debt Survey To assess the prevalence, causes, and consequences of medical debt among Medicare-age adults.
Key Takeaways
- More than one in five U.S. adults age 65 and older (22%) report having some debt in 2022 as a result of their own or someone else’s medical or dental expenses, half the rate for adults ages 50-64 (44%).
- Among Medicare-age adults with medical debt, a high percentage said some of the bills that caused their debt were for routine medical services, such as lab and diagnostic tests (49%), dental care (48%), and doctor’s visits (41%).
- Nearly three in ten Medicare-age adults (29%) with medical debt say a debt collection agency has contacted their household because of a medical or dental bill in the past five years, and one in four (23%) say medical debt has negatively affected their credit score.
- Three in five Medicare-age adults with medical debt (62%) say that in the past year, they or someone in their household delayed, stopped or looked for alternatives to needed medical care or prescription medication because of cost.
By 2022, more than one in five (22%) U.S. adults age 65 and older had some form of debt as a result of medical or dental expenses (Figure 1)This is about half the percentage of adults ages 50 to 64 who are not yet eligible for Medicare based on age (44%). The lower medical debt rate among seniors can be attributed in part to Medicare coverage for nearly everyone over age 65. In addition, most Medicare beneficiaries have some form of insurance that limits their out-of-pocket costs, such as Medicare Advantage, or supplemental insurance such as Medicaid, retiree health benefits, or Medigap.
The medical debt rate for people aged 65 and over is Reported by othersThis is largely due to differences in how medical debt is defined. Surveys of U.S. medical debt typically focus on unpaid medical bills or bills sent to collection agencies, potentially overlooking the proportion of adults who pay for their medical bills by accumulating credit card debt, taking out loans, or borrowing from family and friends. KFF Medical Debt Survey It provides a broad measure of medical debt, which includes other types of debt incurred as a result of medical and dental expenses, as well as debt owed for the care of others, such as children, spouses, or parents.
Many seniors are paying for medical expenses by accumulating credit card debt and other debt (Figure 2).Nearly 1 in 10 Medicare-age adults report paying medical or dental bills directly to providers in installments (12%), paying in installments on a credit card (11%), having past due or unable to make payments (8%), or owing money to a bank, debt collection agency, or other lender as a result of a loan they used to pay for medical or dental bills (7%). A smaller number report owing money to family or friends for money they borrowed to pay for medical or dental bills (3%).
Roughly two in five Medicare-age adults (39%) with medical debt owe less than $1,000, and of those, one in five (19%) owe less than $500, while one in ten Medicare-age adults (11%) with medical debt owe more than $10,000 (data not shown).Even relatively small amounts of debt can lead to a lower credit rating.
The causes of medical debt among older adults are diverse and include routine medical needs (Figure 3).Nearly half of Medicare-age adults with medical debt say some of the bills that caused their debt are due to lab or diagnostic tests (49%), dental work (48%), or doctor’s visits (41%). One in three (31%) say some of their debt is due to emergency care, and one in four (24%) say it’s due to prescription drugs. Dental care is one of the leading causes of medical debt for Medicare-age adults, likely because traditional Medicare doesn’t cover dental services (most Medicare Advantage plans include dental coverage, but coverage varies widely and enrollees can still incur large out-of-pocket costs for these services).
Only 6% of Medicare-age adults said that some of their debt was attributable to the cost of long-term care services or assistance, such as nursing home care, assisted living, and full-time or nearly full-time home care aides. Although these services are widely used by a relatively small segment of the Medicare population, they can be very expensive. For example, the median annual cost of a private room in a nursing home was $116,800 in 2023, and the cost of 24-hour home care aide services was $288,288. These costs far exceed the median income ($36,000 per person) and savings ($103,800 per person) of the average Medicare recipient in 2023. Medicare does not generally cover these services, making them out of reach for many seniors, and some seniors may be unable to afford them. Large debts(The survey results likely underestimate the costs and associated debts incurred by people living in nursing homes, assisted living facilities and other institutions, but they do include debts associated with long-term services and supports incurred by other family members.)
The financial impact of medical debt can be lastingNearly three in ten Medicare-age adults (29%) with medical debt say they have been contacted by a collection agency because of medical or dental bills, and one in four (23%) say their medical debt has negatively affected their credit score (Figure 4). For retirees with medical debt, these effects can be hard to reverse and may make it even harder to secure affordable credit in the future. The Consumer Financial Protection Bureau recently Proposed the rule The bill would remove medical bills from most credit reports and prohibit lenders from making lending decisions based on medical information, with the goal of reducing medical burden for American adults and protecting them from coercive credit reporting practices.
Two in five Medicare-age adults with medical debt report that medical debt has caused them or a member of their household to cut back on spending on necessities (42%) or use up a large portion of their savings (39%) in the past five years (Figure 5).One in three have withdrawn money from long-term savings accounts such as retirement accounts (34%), increased credit card debt to make non-medical purchases (31%), one in five have taken out loans (21%), or skipped or postponed payments on other bills (18%). These sacrifices can have serious effects on financial stability and general health, and can perpetuate the vicious cycle of medical debt as seniors have less funds available for other necessary medical expenses.
Three in five Medicare-age adults (62%) with medical debt say they or a family member have delayed, stopped or sought alternatives to needed medical care or prescription medications because of the cost (Figure 6).Nearly half (48%) of Medicare-age adults with medical debt put off getting needed medical care in the past year, two in five (43%) turned to home remedies or over-the-counter drugs instead of going to the doctor, and one in three forgot to undergo medical tests or treatments recommended by a doctor (31%) or took less than prescribed by skipping doses, cutting their medication in half, or not filling their prescriptions (28%).
