More Than A Quarter Of Americans Grappling With Medical Debt

More than a quarter of U.S. adults say they or their family members were grappling with medical debt as of 2025, according to a new analysis by the Urban Institute.

The Urban Institute’s latest survey found that 26.6% of Americans reported they or their families owed medical debt in December 2025. This sum includes 15.4% of respondents who reported having past-due medical bills or bills they were unable to afford.

Unaffordable hospital care costs and a lack of competition across the nation’s healthcare system may be worsening medical debt burdens for some Americans, experts warned the Daily Caller News Foundation.

“One of the biggest drivers of medical debt is the soaring cost of hospital care,” Pacific Research Institute President Sally Pipes told the DCNF. “According to Rice University’s Baker Institute, hospital prices increased more than 220% between 2000 and 2022, nearly three times the rate of overall inflation.”

“A major reason is the lack of competition,” Pipes continued. “According to KFF, one or two health systems controlled the entire inpatient hospital market in nearly half of metropolitan areas in 2024. When hospitals face little competition, they have less incentive to keep prices down — and patients have fewer affordable alternatives. It’s no surprise, then, that more than half of Americans with medical debt owe money for hospital services.”

A White House Council of Economic Advisers report released in June suggests that prohibiting “anti-competitive” hospital contracting practices could help lower health costs nationwide.

However, Pipes noted that some “headlines about medical debt often paint a more alarming picture than the underlying data.”

“The Urban Institute’s latest survey found that more than one in four adults had medical debt in 2025,” she said. “But that figure includes people paying their bills in installments. Just 15.4% reported past-due medical bills or bills they couldn’t afford to pay. And nearly half of those with medical debt owed less than $1,000.”

Medical debt was most common among U.S. adults ages 45 to 54, black adults, Hispanic adults or people of races other than white or Asian and those with incomes between 100% to 200% of the federal poverty level, according to the Urban Institute’s survey. Rates were also higher among individuals who were uninsured, had a disability or said they were “in fair or poor health,” per the report.

“Medical debt is a problem,” Cato Institute Director of Health Policy Studies Michael Cannon told the DCNF. “It is a smaller problem than many claim. Especially those who are for some reform they want, ‘Medicare for All.’ Medical debt is a larger problem than it should be.”

“The reason is that government increases medical prices and unnecessary medical services, and creates gaps in coverage that would not otherwise exist,” he added. “The solution is to remove those government interventions, so more people can pay their medical bills because they use fewer unnecessary services, medical prices are lower and there are fewer gaps in insurance.”

One of the key drivers of medical debt is issues with inadequate healthcare coverage, according to a June 2023 fact sheet from the American Hospital Association.

“Medical debt is a genuine financial hardship for some Americans, particularly those facing large bills,” Paragon Health Institute President Brian Blase told the DCNF. “But it is important to distinguish between relatively small outstanding balances and substantial debt burdens.”

“The fundamental purpose of health insurance is to protect people against the financial risk of large, unexpected medical expenses,” he explained. “Insurance substantially reduces that risk, although deductibles and other out-of-pocket costs mean that insured people can still accumulate medical debt.”

Blase went on to say that medical debt “should not be confused with medical bankruptcy.”

“People experiencing financial distress often have multiple forms of debt, and the presence of outstanding medical bills does not establish that medical expenses caused the bankruptcy,” he said.

Recent polling indicates that voters have become increasingly frustrated with rising healthcare costs ahead of the November midterms. A KFF poll published on Oct. 6 found that one quarter of voters say they feel “very worried” about being able to afford healthcare and gas costs.

The Urban Institute’s analysis used December 2025 data from its Well-Being and Basic Needs Survey (WBNS), a nationally representative annual survey of more than 10,000 U.S. adults.

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