The scale of medical debt in the United States

Roughly 41 million Americans carry medical debt, according to the Consumer Financial Protection Bureau's 2021 survey. That figure represents people with unpaid medical bills on their credit report or in collection. The actual number of people who have faced medical bills they struggled to pay is substantially higher — surveys asking about payment difficulty rather than debt status find that 26 to 45 percent of American adults report trouble paying medical costs in a given year.

Medical debt is the single largest source of personal debt in collections. It outpaces credit card debt, auto loans, and other consumer debts as the reason people end up in collection accounts. The debt exists across all income levels, though it concentrates most heavily among people earning under $50,000 annually and among those without employer health insurance.

Key Takeaways

  • Approximately 41 million Americans have medical debt reported on their credit record, making it the largest source of debt in collections.
  • Medical debt appears on credit reports differently than other debts — some hospitals and providers report to credit bureaus while others do not, so the 41 million figure captures only reported debt.
  • People earning under $50,000 per year and those without employer insurance carry medical debt at higher rates than other groups.
  • Medical debt can remain on your credit report for up to seven years even after you pay it, though paid medical debt now has less impact on credit scores than unpaid debt.

Why medical debt numbers vary depending on the source

Different surveys produce different estimates because they measure different things. The Consumer Financial Protection Bureau counted people with medical debt appearing on their credit report — meaning a provider or collector reported it to Equifax, Experian, or TransUnion. Not all medical providers report to credit bureaus. Many hospitals and clinics send bills directly to patients and only report to credit agencies if the account goes to a collection agency, which can take months or years.

Surveys that ask people directly whether they have unpaid medical bills or struggled to pay medical costs produce higher numbers because they capture debt that has not yet been reported to credit bureaus, debt that was paid but still appears on the report, and debt that never reached a credit bureau at all. The Commonwealth Fund found that 45 percent of working-age adults reported difficulty paying medical bills in 2022, a much higher figure than the 41 million with reported debt.

Age, income, and insurance status all shift these numbers. Adults under 65 without employer insurance report medical debt at roughly double the rate of insured adults. People over 65 on Medicare report lower rates of medical debt overall, though those with high out-of-pocket costs still carry substantial balances.

How medical debt appears on credit reports

Medical debt reaches your credit report only if a provider or collection agency reports it. The process typically works this way: a hospital or medical provider sends you a bill. If you do not pay, they may send it to a collection agency after 60 to 180 days. The collection agency then reports the debt to credit bureaus, and it appears on your credit report.

Some providers report directly to credit bureaus without using a collection agency. Others never report to credit bureaus at all — they may pursue payment through small claims court or straightforward write off the debt. This means two people with identical unpaid medical bills may have very different credit report outcomes depending on which provider treated them.

Medical debt that appears on your credit report can lower your credit score, though the impact has changed in recent years. As of 2023, the three major credit bureaus stopped including paid medical debt in credit score calculations, and unpaid medical debt now has less weight than it did previously. Unpaid medical debt still appears on your report and can still affect lending decisions, but the scoring penalty is smaller than it was before 2023.

Medical debt by age and income level

Medical debt concentrates most heavily among working-age adults earning under $50,000 per year. This group faces both higher medical costs relative to income and less access to employer health insurance that covers a larger share of expenses. Adults aged 35 to 64 report medical debt at higher rates than younger adults, partly because they have accumulated more medical events and partly because they are more likely to have chronic conditions requiring ongoing treatment.

Adults over 65 on Medicare report lower rates of medical debt overall, though those with supplemental insurance gaps or high out-of-pocket costs still carry balances. Young adults aged 18 to 34 report medical debt at lower rates than middle-aged adults, but those without employer insurance or Medicaid report substantially higher rates than their insured peers.

Income is the strongest predictor of medical debt. Adults earning under $25,000 per year report medical debt at roughly three times the rate of those earning over $100,000. This gap persists even among insured adults, because lower-income people face higher out-of-pocket costs relative to their income and have fewer savings to cover unexpected bills.

The difference between reported and unreported medical debt

The 41 million figure counts only medical debt that appears on credit reports. Unreported medical debt — bills that have not yet reached a collection agency, that were paid but still appear on the report, or that a provider chose not to report — is not included in that count. Surveys asking people directly about medical bills they owe or struggled to pay suggest the actual number is substantially higher.

Unreported debt can still affect your finances even though it does not appear on your credit report. A provider or collection agency can sue you for unpaid medical bills, garnish your wages, or place a lien on your property. Some states have stronger protections against medical debt collection than others, so the consequences of unreported debt vary by location.

How medical debt compares to other types of consumer debt

Medical debt is the largest source of debt in collections — more common than credit card debt, auto loans, or personal loans in collection accounts. However, the total dollar amount of medical debt is smaller than credit card debt overall, because individual medical debts tend to be smaller than individual credit card balances.

Medical debt also behaves differently than other consumer debt. Credit card companies and auto lenders report to credit bureaus as a matter of routine. Medical providers do not, which means medical debt is less visible on credit reports than other debts of similar size. This invisibility can work both ways: it means some medical debt never reaches your credit report, but it also means lenders may not see all your medical obligations when deciding whether to lend to you.

Frequently Asked Questions

Does all medical debt show up on credit reports?

No. Medical debt appears on your credit report only if the provider or a collection agency reports it to credit bureaus. Many providers do not report to credit bureaus, so their unpaid bills never appear on your report. Others report only after sending the debt to a collection agency, which can take several months.

How long does medical debt stay on your credit report?

Medical debt can remain on your credit report for up to seven years from the date it was first reported, even if you pay it. As of 2023, paid medical debt no longer affects your credit score, but unpaid medical debt still does. The seven-year clock resets if you make a payment or acknowledge the debt in writing.

Can medical debt be removed from my credit report if I pay it?

Paying medical debt stops it from growing and stops collection calls, but it does not automatically remove the debt from your credit report. You can request that a collection agency remove it in exchange for payment — this is called "pay for delete" — but collection agencies are not required to agree. Some providers will remove debt if you pay in full; others will not.

Is medical debt treated differently than credit card debt by lenders?

Lenders treat medical debt differently depending on whether it appears on your credit report and how recent it is. As of 2023, unpaid medical debt has less impact on credit scores than unpaid credit card debt. However, lenders can still see medical debt on your report and may factor it into lending decisions separately from your credit score.

What percentage of Americans have medical debt?

Approximately 12 percent of Americans have medical debt reported on their credit report. However, surveys asking people directly about medical bills they owe or struggled to pay find that 26 to 45 percent of adults report medical debt or payment difficulty, depending on the survey and year. The difference reflects debt that has not been reported to credit bureaus.