Medical Debt Affects 27% of U.S. Adults, With More Than One-Third Facing Collection Agency Contact
More than one-quarter of U.S. adults reported that they or a family member had medical debt in 2025, and more than one-third of those with medical debt experienced collection agency contact, according to a new Urban Institute report funded by the Robert Wood Johnson Foundation.
The report, released Oct. 6, found that 26.6% of adults had medical debt as of December 2025, including 25.7% of insured adults and 35.2% of uninsured adults. The findings highlight the continuing financial burden of health care expenses and the role of debt collection in recovering unpaid medical bills.
More Than Half of Medical Debt Holders Owe at Least $1,000
The Urban Institute analyzed responses from more than 10,000 adults participating in its December 2025 Well-Being and Basic Needs Survey.
Among adults reporting medical debt, 53.8% owed at least $1,000, while 15.5% owed $5,000 or more.
Hospitals were the most frequently reported source of medical debt, with 52.1% of affected adults owing money for hospital services. Other common sources included specialist physicians (41.5%), dental providers (37.6%), and general practitioners (33.5%).
Medical debt was particularly prevalent among adults with disabilities (41.1%), those reporting fair or poor health (42%), and adults ages 45 to 54 (33.9%).
The report also identified disparities across racial and ethnic groups, with 37.5% of Black adults and 34.8% of Hispanic adults reporting medical debt.
Collection Agencies Contact More Than One-Third of Medical Debt Holders
The findings carry particular significance for the accounts receivable management industry.
According to the report, 35.2% of adults with medical debt said they or a family member had been contacted by a collection agency about unpaid medical bills within the previous 12 months.
Additionally, 21.7% reported that unpaid medical bills had lowered their credit scores, while 4.7% said they or a family member had faced a lawsuit over medical debt.
Researchers found that 18.1% of adults with medical debt in states with medical debt credit reporting restrictions still reported credit score declines associated with unpaid medical bills.
The report noted that medical expenses paid through credit cards or other loans may continue affecting credit scores even where direct medical debt reporting is restricted.
Rising Costs Could Increase Medical Debt Exposure
The Urban Institute warned that rising insurance premiums, higher deductibles, and changes to federal health coverage programs could increase the number of households struggling with medical debt.
The report cited projections that federal Medicaid and Affordable Care Act Marketplace policy changes could increase the uninsured population by approximately 15 million people.
For health care providers and ARM professionals, the findings underscore the importance of monitoring medical debt collection practices, state credit reporting restrictions, and patient financial assistance requirements.
As medical expenses continue placing pressure on household budgets, providers and collection agencies may face additional challenges recovering outstanding balances while navigating evolving consumer protection requirements.
The full findings are available in the Urban Institute’s October 2026 medical debt report.
