Medical Debt Crisis Hits Millions as Medicaid Changes Heighten Risks
Medical debt remains a significant challenge for millions of Americans, with nearly 20 million individuals currently burdened by outstanding medical bills. Approximately one in twelve Americans owes substantial health-related debt, totaling at least $220 billion nationwide. This issue is especially acute in Southern states, where Medicaid expansion under the Affordable Care Act has been limited, disproportionately impacting Black populations who carry similar medical debt burdens as uninsured non-Black households.
Recent legislative changes, including the GOP tax bill, risk increasing the number of uninsured individuals by pushing millions off Medicaid, potentially escalating family medical debt by up to $22,800. This will disproportionately affect low-income and minority groups, with projections indicating millions of Black and Latino Medicaid recipients could lose coverage. A federal ruling recently reversed a Consumer Financial Protection Bureau (CFPB) rule that would have removed medical debt from credit reports, protecting roughly 15 million Americans from adverse lending decisions based on medical histories. Nonprofit organizations such as Undue Medical Debt and Dollar For play a vital role in alleviating medical debt by purchasing and forgiving patient debts. Undue Medical Debt targets individuals whose medical debts exceed a significant proportion of their income, assisting tens of thousands nationwide.
Their work highlights the systemic nature of medical debt, emphasizing the need for broader reforms to ensure affordable health insurance access. The nonprofit sector also includes organizations like Dollar For, which focuses on identifying eligible patients for charity care—a provision mandated for nonprofit hospitals that is often underutilized due to inconsistent application processes and lack of patient awareness.
Despite these efforts, many nonprofit hospitals continue to send bills to patients who likely qualify for charity care, accumulating billions in potentially avoidable charges. The growing economic instability tied to changing Medicaid coverage and rising medical debt underscores the increasing importance of these nonprofits' interventions as stopgap support. However, these initiatives are not a long-term remedy, and experts emphasize that sustained access to affordable healthcare insurance remains central to addressing the root causes of medical debt.