When a person’s medical bills exceed what they can pay, they are saddled with medical debt.

Who has medical debt? To start, the uninsured. More than one-third of people with no insurance have medical debt. Many of them are living in states that have not expanded Medicaid. People in these states also have a greater number of accounts being sent to collection when compared to residents of Medicaid expansion states. Additionally, 22 percent of insured people have outstanding medical bills.

disproportionate effect on people of color, with nearly 27 percent of Black households and just under 19 percent of Latinx families having medical debt. In addition, households with income of less than 133 percent of the federal poverty level are more likely to have problems paying medical bills. Families in households with children are far more likely to have medical debt than those with no children in the household. Families in which a member has a disability are nearly twice as likely to have medical debt as those families in which no family member has a disability.

forced to exhaust their savings to pay for medical bills, and consequently reduce their spending on food, clothing, and other household items, borrow money from friends or family members, or take on additional debts. 37 percent of people with medical debt or billing problems used up all their savings to pay their medical bills, 31 percent took on new credit card debt, and 11 percent took out a mortgage against their home or took out another type of loan to pay their medical bills.

How do people hold debt? We know that medical debt comes in various forms: money owed directly to hospitals and providers; bills owed providers that that are being pursued by third-party collection agencies; payments for care that has been charged to credit cards; loans from companies that specialize in financing medical debt; and medical accounts that have been purchased by debt buyers. Unfortunately, we do not know precisely the amount of debt in these different categories.

Who owns medical debt? Who holds the debt can make a huge difference in whether a person’s medical bill problem is alleviated or aggravated. Many hospitals and providers offer extended payment plans, with no interest, directly to their patients. Non-profit hospitals are obligated to provide charity care or financial assistance, but many people are unaware of these programs. The Washington State Office of the Attorney General recently filed lawsuits against two Washington hospitals alleging that employees were trained using scripts that gave patients the impression that they were expected to pay for their care, failing to notify them that they were eligible for financial assistance.

New Mexico Center on Law and Poverty, Casa de Salud and Forward Together:

reported that there has been a surge in demand from hospitals for their services and that these companies are very profitable and attractive for investors. This will likely make it even more difficult for patients to negotiate reasonable payment plans directly with their local hospitals and providers.

Is the debt even owed? Medical debt can ruin an individual’s credit rating. Research from the Consumer Financial Protection Bureau (CFPB) found that 58 percent of collection accounts on credit reports are medical bills. These accounts are reported by third-party collection agencies; they often lack accurate or updated information from the original health care provider. While the CFPB estimates that $88 billion in medical collections sit on consumer credit reports, other estimates range from $81 billion to $140 billion.

What are debt collection practices? Third party collection agencies, acting on behalf of hospitals and other providers, often pursue lawsuits. Legal actions include garnishing wages, putting liens on patients’ homes and bank accounts, and even issuing civil arrest warrants for people who do not comply with repayment terms.

took legal action, with one West Virginia hospital being responsible for close to 18,000 lawsuits.

medical debt owed to a hospital.

sent to jail.

she was terrified.