Medical Debt: An Unintended Side Effect of the American Healthcare System

ISHAN VAISH – Surveys suggest that 1 in 4 Americans struggle to pay their healthcare bills.This statistic may explain why over 140 million Americans are currently experiencing medical debt. In light of an ongoing pandemic and economic recession, this number is likely to only increase in the coming year. For a country that leads the world in its economic and military power, it begs the question: why is medical debt so prominent?

A lack of health insurance partly causes medical debt. Especially amidst an economic downturn, people who depend on their job for health insurance may suddenly find themselves stranded and responsible for footing all of their medical bills. However, a lack of healthcare insurance is not the only contributing factor. Younger adults often opt for higher deductible plans from their job’s healthcare insurance options on the assumption that they will not be accessing healthcare resources enough to warrant a higher premium but lower deductible. However, in the case of an unexpected illness or injury, this strategy can backfire, and roughly one in five Americans who have health insurance, because of their job, struggle to pay their medical bills. 

Medical debt can be especially problematic because, for many, it becomes a downward spiral. People with chronic health conditions report having more medical debt than their healthier counterparts because their health status hinders them from working and paying their debt. Coupled with inevitable future health costs, they are sucked into a cycle of increasing debt. Health status is not the only demographic that correlates to medical debt. Minority groups, specifically women, Black, and Latinx individuals, report higher medical debt levels than their majority group counterparts. This disproportionality does not appear to stem from more significant use of healthcare services but structural factors such as job opportunity and, consequently, insurance status. 

Though medical debt is a growing crisis in America, there are several potential solutions. An overwhelming source of medical debt is emergency room visits. Due to their often dire condition, patients are unaware of the treatments they are receiving and, as a result, walk out of the hospital with thousands of dollars of complicated medical bills. In these instances, transparent pricing and procedures may serve an invaluable role. If doctors only performed those services which they knew were essential, costs would inherently decrease. Simultaneously, if the billing process were more straightforward, patients would understand what they were being charged for and contest any charges they did not think were fair. The fact that emergency room visits contribute so heavily to medical debt also highlights the need for prevention-focused healthcare. Due to the structure of current insurance systems and healthcare laws, people often push off seeing a doctor until they absolutely have to. At that point, their condition has worsened to the extreme that it is no longer inexpensive to treat. The development of a unified healthcare system where all Americans have healthcare insurance and can thus see a doctor earlier in the onset of their sickness may reduce this contributing factor to medical debt. 

Medical debt continues to be a reality for millions of Americans each year. In light of the COVID-19 pandemic, this problem is only slated to become more devastating. Though healthcare reform is often a point of controversy, it is becoming increasingly apparent that change is necessary to make healthcare more accessible and equitable. 

Copy Editor: Sophia Bartell

Photography Source: Bianca Patel