New Report Finds 26.6% of U.S. Adults Had Medical Debt, With More Than One-Third Facing Collection Activity
More than one-quarter of U.S. adults reported having medical debt in 2025, with more than one-third of those carrying medical debt experiencing collection agency contact, according to a new Urban Institute report. The findings highlight the continued prevalence of unpaid medical bills, the role of collection agencies in medical debt recovery, and the financial consequences facing consumers as health care costs increase.
The report, “More than One-Quarter of US Adults Had Medical Debt in 2025,” was published Oct. 6, 2026, by Urban Institute researcher Michael Karpman. Funded by the Robert Wood Johnson Foundation, the analysis draws on the December 2025 Well-Being and Basic Needs Survey, which included more than 10,000 adults ages 18 and older.
Medical Debt Affects More Than One in Four Americans
According to the report, 26.6% of U.S. adults reported that they or their family members owed money for medical or dental expenses they could not pay in full.
The research identified several forms of outstanding medical debt:
- 15.4% reported medical bills that were past due or that their families were unable to pay.
- 14.8% were paying medical bills over time directly to a health care provider.
- 10.9% had transferred medical expenses to credit cards and were paying those balances over time.
- 8.4% owed money to banks, collection agencies, or other lenders for debt used to cover medical expenses.
- 4.9% had borrowed money from family members or friends to pay medical bills.
These categories overlap because respondents could report multiple forms of debt.
The findings illustrate how medical expenses can create financial obligations across several channels, including direct provider billing, installment payments, credit cards, and third-party debt collection.
More Than One-Third of Medical Debt Holders Report Collection Agency Contact
One of the report’s most relevant findings for the accounts receivable management industry concerns the frequency of medical debt collection activity.
Among adults reporting medical debt, 35.2% said they or their families had been contacted by a collection agency about unpaid medical bills during the previous 12 months.
The report also found that 21.7% of adults with medical debt believed their unpaid medical bills had lowered their credit scores, while 4.7% reported that a health care provider or collection agency had filed a lawsuit against them or a family member over unpaid medical bills.
Collection agency contact varied across states based on their medical debt credit reporting restrictions.
In states that had adopted restrictions effective between 2023 and 2025, 29.5% of adults with medical debt reported collection agency contact. That figure increased to 37.2% in states without those restrictions.
The study did not establish that credit reporting restrictions caused the difference in collection activity.
For debt collection agencies and health care creditors, the findings reinforce the importance of distinguishing collection communications, credit furnishing and litigation as separate activities subject to different legal requirements.
Hospitals Account for the Largest Share of Medical Debt
Hospitals were the most frequently reported source of unpaid medical expenses.
Among adults with medical debt, 52.1% reported owing money for hospital services. Other common sources included specialist physicians at 41.5%, dental providers at 37.6%, general physicians at 33.5%, and laboratories or diagnostic facilities at 31.9%.
Most respondents with medical debt reported obligations originating from more than one category of health care provider.
The amount owed was also significant, with more than half of adults with medical debt, 53.8%, reporting balances of at least $1,000. Another 15.5% reported owing $5,000 or more.
Larger balances were particularly common among adults with hospital-related obligations. Of those owing money for hospital services, 23.2% reported medical debt totaling at least $5,000, compared with 7.1% of adults whose medical debt came exclusively from other providers.
Uninsured adults and those with past-due medical bills also had higher concentrations of balances exceeding $5,000.
These differences may be relevant to health care revenue cycle management, including patient financial assistance, payment arrangements, account segmentation and collection strategies.
Medical Debt Persists Despite Insurance Coverage
The report found substantial differences in medical debt prevalence based on insurance status, income, age, and health.
Among uninsured adults, 35.2% reported medical debt, compared with 25.7% of insured adults.
Medical debt was most prevalent among adults ages 45 to 54, with 33.9% reporting outstanding obligations. Adults with disabilities reported particularly high rates at 41.1%, while 42% of adults describing their health as fair or poor reported medical debt.
Income was another significant factor. Adults with family incomes between 100% and 199% of the federal poverty level had the highest reported rate among the income groups examined, at 37.8%.
Even among adults ages 65 and older, who generally qualify for Medicare, 17.6% reported that they or a family member owed medical debt.
Researchers noted that health insurance does not eliminate exposure to medical debt because patients may still face deductibles, coinsurance, uncovered services, and denied claims.
State Credit Reporting Restrictions Add Compliance Considerations
The report also examined medical debt consequences in states that had enacted credit reporting protections.
Among adults with medical debt living in the 14 states where such restrictions took effect between 2023 and 2025, 18.1% reported that medical debt had lowered their credit scores. In states without those restrictions, the figure was 22.9%.
Researchers suggested that some consumers may be unfamiliar with protections established under state law.
However, the report also noted that medical expenses financed through credit cards or loans can continue affecting credit scores through utilization and repayment activity, even when medical debt reporting restrictions are in place.
The 14 states examined were California, Colorado, Connecticut, Delaware, Illinois, Maryland, Maine, Minnesota, New Jersey, New York, Rhode Island, Vermont, Virginia and Washington. Similar restrictions took effect in Oregon and Washington, D.C., in 2026.
For medical debt collectors, credit reporting agencies and creditors, these differing requirements create jurisdiction-specific compliance considerations, particularly when determining whether medical debt information may be furnished or considered in credit decisions.
Rising Health Care Costs Could Increase Medical Debt Exposure
The Urban Institute warned that rising premiums, deductibles, and changes to public health insurance programs could increase the number of households exposed to medical debt.
The report cited the expiration of enhanced Affordable Care Act Marketplace premium subsidies and federal changes affecting Medicaid and Marketplace coverage as potential contributors to future affordability challenges.
Researchers also noted that reduced insurance coverage could increase uncompensated care costs for health care providers.
For the receivables management industry, the findings provide a snapshot of medical debt prevalence at a time when health care affordability and state-level collection protections remain significant operational considerations.
The report underscores the importance of accurate account information, appropriate financial assistance screening, compliant collection communications, and careful evaluation of state-specific restrictions as health care creditors and collection agencies manage outstanding patient balances.
The analysis measures self-reported family medical debt rather than exclusively delinquent accounts assigned to third-party collectors. Its findings therefore should not be interpreted as a direct measure of the medical debt collection market or future account placements.
