One surprising risk: living in a community where hospitals have consolidated — an increasingly common development as health systems merge or large systems gobble up smaller hospitals.

That’s according to a new report shared exclusively with KFF Health News by the Urban Institute, a nonprofit that has been tracking medical debt across the United States for years and worked with KFF Health News on our Diagnosis: Debt project.

It’s already well-documented that hospitals raise prices when they gain market power, which can happen when systems get bigger or competitors close.

So researchers at Urban wondered if market concentration could also leave more patients in debt.

“With fewer alternatives and higher prices, patients may have limited options to seek more affordable care,” the report’s authors hypothesized. “They might delay seeking treatment, potentially leading to worse outcomes and even higher medical debt in the future.”

Making such a direct link is tricky, in part because many factors influence how much medical debt there is in a community.

Urban researchers have already established, for example, that medical debt is higher in counties with larger shares of uninsured residents and higher levels of chronic illnesses such as cancer or diabetes.

To explore the impact of consolidation, researchers first looked at hospital concentration in every U.S. county.

They then looked at credit bureau data to see the share of county residents with an unpaid medical bill on a credit report, which is one measure of medical debt in a community.

Nationally, the share of people with a medical bill on a credit report has been declining. But the researchers noticed that the declines were less pronounced in counties where hospitals had become more consolidated, even after accounting for other factors.

“While medical debt on credit reports declined across most U.S. counties between 2012 and 2022, increases in hospital market concentration prevented such improvements in many areas of the country,” they wrote.

Perhaps not surprisingly, the report drew criticism from the American Hospital Association (AHA), the industry’s largest trade group. Molly Smith, group vice president for public policy at the AHA, called it a “thin analysis” that didn’t account for more important factors driving medical debt such as the rise of high-deductible health plans.

“Until policymakers account for the real drivers in medical debt,” she said, “our country won’t be able to develop public policies that address this significant problem.”

The Urban Institute’s Breno Braga, one of the report’s authors, acknowledged that factors such as chronic illness remain stronger predictors of medical debt than market consolidation. But, he said, the new research should give policymakers another reason to scrutinize the growing market power of health systems across the country.

“Limiting hospital consolidation could be beneficial for consumers in limiting medical debt,” he said.

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Y ven a la vicepresidenta y candidata demócrata como la mejor esperanza para preservar el acceso de los estadounidenses a seguros de salud. La cobertura integral que limita los costos directos de los pacientes es la mejor defensa contra el endeudamiento, dicen los expertos.

La administración Biden ha ampliado las protecciones financieras para los pacientes, incluyendo una propuesta histórica de la Oficina de Protección Financiera del Consumidor (CFPB) para eliminar la deuda médica de los informes de crédito de los consumidores.

En 2022, el presidente Joe Biden también firmó la Ley de Reducción de la Inflación, que limita cuánto deben pagar los afiliados de Medicare por medicamentos recetados, incluyendo un tope de $35 al mes para la insulina. Y en legislaturas de todo el país, demócratas y republicanos han trabajado juntos de manera discreta para promulgar leyes que frenen a los cobradores de deudas.

Sin embargo, defensores dicen que el gobierno federal podría hacer más para abordar un problema que afecta a 100 millones de estadounidenses, obligando a muchos a trabajar más, perder sus hogares y reducir el gasto en alimentos y otros artículos esenciales.

“Biden y Harris han hecho más para abordar la crisis de deuda médica en este país que cualquier otra administración”, dijo Mona Shah, directora senior de política y estrategia en Community Catalyst, una organización sin fines de lucro que ha liderado los esfuerzos nacionales para fortalecer las protecciones contra la deuda médica. “Pero hay más por hacer y debe ser una prioridad para el próximo Congreso y administración”.

Al mismo tiempo, los defensores de los pacientes temen que si el ex presidente Donald Trump gana un segundo mandato, debilitará las protecciones de los seguros permitiendo que los estados recorten sus programas de Medicaid o reduciendo la ayuda federal para que los estadounidenses compren cobertura médica. Eso pondría a millones de personas en mayor riesgo de endeudarse si enferman.

En su primer mandato, Trump y los republicanos del Congreso intentaron en 2017 derogar la Ley de Cuidado de Salud a Bajo Precio (ACA), un movimiento que, según analistas independientes, habría despojado de cobertura médica a millones de estadounidenses y habría aumentado los costos para las personas con afecciones preexistentes, como diabetes y cáncer.

Trump y sus aliados del Partido Republicano continúan atacando a ACA, y el ex presidente ha dicho que quiere revertir la Ley de Reducción de la Inflación, que también incluye ayuda para que los estadounidenses de bajos y medianos ingresos compren seguros de salud.

“Las personas enfrentarán una ola de deuda médica por pagar primas y precios de medicamentos recetados”, dijo Anthony Wright, director ejecutivo de Families USA, un grupo de consumidores que ha apoyado las protecciones federales de salud. “Los pacientes y el público deberían estar preocupados”.

La campaña de Trump no respondió a consultas sobre su agenda de salud. Y el ex presidente no suele hablar de atención médica o deuda médica en la campaña, aunque dijo en el debate del mes pasado que tenía “conceptos de un plan” para mejorar la ACA. Trump no ha ofrecido detalles.

Harris ha prometido repetidamente proteger ACA y renovar los subsidios ampliados para las primas mensuales del seguro creados por la Ley de Reducción de la Inflación. Esa ayuda está programada para expirar el próximo año.

La vicepresidenta también ha expresado su apoyo a un mayor gasto gubernamental para comprar y cancelar deudas médicas antiguas de los pacientes. En los últimos años, varios estados y ciudades han comprado deuda médica en nombre de sus residentes.

Estos esfuerzos han aliviado la deuda de cientos de miles de personas, aunque muchos defensores dicen que cancelar deudas antiguas es, en el mejor de los casos, una solución a corto plazo, ya que los pacientes seguirán acumulando facturas que no pueden pagar sin una acción más sustantiva.

“Es un bote con un agujero”, dijo Katie Berge, una cabildera de la Sociedad de Leucemia y Linfoma. Este grupo de pacientes fue una de más de 50 organizaciones que el año pasado enviaron cartas a la administración Biden instando a las agencias federales a tomar medidas más agresivas para proteger a los estadounidenses de la deuda médica.

“La deuda médica ya no es un problema de nicho”, dijo Kirsten Sloan, quien trabaja en política federal para la Red de Acción contra el Cáncer de la Sociedad Americana de Cáncer. “Es clave para el bienestar económico de millones de estadounidenses”.

La Oficina de Protección Financiera del Consumidor está desarrollando regulaciones que prohibirían que las facturas médicas aparezcan en los informes de crédito de los consumidores, lo que mejoraría los puntajes crediticios y facilitaría que millones de estadounidenses alquilen una vivienda, consigan un trabajo o consigan un préstamo para un automóvil.

Harris, quien ha calificado la deuda médica como “crítica para la salud financiera y el bienestar de millones de estadounidenses”, apoyó con entusiasmo la propuesta de regulación. “No se debería privar a nadie del acceso a oportunidades económicas simplemente porque experimentó una emergencia médica”, dijo en junio.

El compañero de fórmula de Harris, el gobernador de Minnesota, Tim Walz, quien ha dicho que su propia familia luchó con la deuda médica cuando era joven, firmó en junio una ley estatal que reprime el cobro de deudas.

Los funcionarios de la CFPB dijeron que las regulaciones se finalizarán a principios del próximo año. Trump no ha indicado si seguiría adelante con las protecciones contra la deuda médica. En su primer mandato, la CFPB hizo poco para abordarla, y los republicanos en el Congreso han criticado durante mucho tiempo a la agencia reguladora.

Si Harris gana, muchos grupos de consumidores quieren que la CFPB refuerce aún más las medidas, incluyendo una mayor supervisión de las tarjetas de crédito médicas y otros productos financieros que los hospitales y otros proveedores médicos han comenzado a ofrecer a los pacientes. Por estos préstamos, las personas están obligadas a pagar intereses adicionales sobre su deuda médica.

“Estamos viendo una variedad de nuevos productos financieros médicos”, dijo April Kuehnhoff, abogada senior del Centro Nacional de Derecho del Consumidor. “Estos pueden generar nuevas preocupaciones sobre las protecciones al consumidor, y es fundamental que la CFPB y otros reguladores supervisen a estas empresas”.

Algunos defensores quieren que otras agencias federales también se involucren.

Esto incluye al enorme Departamento de Salud y Servicios Humanos (HHS), que controla cientos de miles de millones de dólares a través de los programas de Medicare y Medicaid. Ese dinero otorga al gobierno federal una enorme influencia sobre los hospitales y otros proveedores médicos.

Hasta ahora, la administración Biden no ha utilizado esa influencia para abordar la deuda médica.

Pero en un posible anticipo de futuras acciones, los líderes estatales en Carolina del Norte recientemente obtuvieron la aprobación federal para una iniciativa de deuda médica que obligará a los hospitales a tomar medidas para aliviar las deudas de los pacientes a cambio de ayuda gubernamental. Harris elogió la iniciativa.

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And they see the vice president and Democratic nominee as the best hope for preserving Americans’ access to health insurance. Comprehensive coverage that limits patients’ out-of-pocket costs offers the best defense against going into debt, experts say.

The Biden administration has expanded financial protections for patients, including a landmark proposal by the Consumer Financial Protection Bureau to remove medical debt from consumer credit reports.

In 2022, President Joe Biden also signed the Inflation Reduction Act, which limits how much Medicare enrollees must pay out-of-pocket for prescription drugs, including a $35-a-month cap on insulin. And in statehouses across the country, Democrats and Republicans have been quietly working together to enact laws to rein in debt collectors.

But advocates say the federal government could do more to address a problem that burdens 100 million Americans, forcing many to take on extra work, give up their homes, and cut spending on food and other essentials.

“Biden and Harris have done more to tackle the medical debt crisis in this country than any other administration,” said Mona Shah, senior director of policy and strategy at Community Catalyst, a nonprofit that has led national efforts to strengthen protections against medical debt. “But there is more that needs to be done and should be a top priority for the next Congress and administration.”

At the same time, patient advocates fear that if former President Donald Trump wins a second term, he will weaken insurance protections by allowing states to cut their Medicaid programs or by scaling back federal aid to help Americans buy health insurance. That would put millions of people at greater risk of sinking into debt if they get sick.

In his first term, Trump and congressional Republicans in 2017 tried to repeal the Affordable Care Act, a move that independent analysts concluded would have stripped health coverage from millions of Americans and driven up costs for people with preexisting medical conditions, such as diabetes and cancer.

Trump and his GOP allies continue to attack the ACA, and the former president has said he wants to roll back the Inflation Reduction Act, which also includes aid to help low- and middle-income Americans buy health insurance.

“People will face a wave of medical debt from paying premiums and prescription drug prices,” said Anthony Wright, executive director of Families USA, a consumer group that has backed federal health protections. “Patients and the public should be concerned.”

The Trump campaign did not respond to inquiries about its health care agenda. And the former president doesn’t typically discuss health care or medical debt on the campaign trail, though he said at last month’s debate he had “concepts of a plan” to improve the ACA. Trump hasn’t offered specifics.

Harris has repeatedly pledged to protect the ACA and renew expanded subsidies for monthly insurance premiums created by the Inflation Reduction Act. That aid is slated to expire next year.

The vice president has also voiced support for more government spending to buy and retire old medical debts for patients. In recent years, a number of states and cities have purchased medical debt on behalf of their residents.

These efforts have relieved debt for hundreds of thousands of people, though many patient and consumer advocates say retiring old debt is at best a short-term solution, as patients will continue to run up bills they cannot pay without more substantive action.

“It’s a boat with a hole in it,” said Katie Berge, a lobbyist for the Leukemia & Lymphoma Society. The patient group was among more than 50 organizations that last year sent letters to the Biden administration urging federal agencies to take more aggressive steps to protect Americans from medical debt.

“Medical debt is no longer a niche issue,” said Kirsten Sloan, who works on federal policy for the American Cancer Society’s Cancer Action Network. “It is key to the economic well-being of millions of Americans.”

The Consumer Financial Protection Bureau is developing regulations that would bar medical bills from consumer credit reports, which would boost credit scores and make it easier for millions of Americans to rent an apartment, get a job, or secure a car loan.

Harris, who has called medical debt “critical to the financial health and well-being of millions of Americans,” enthusiastically backed the proposed rule. “No one should be denied access to economic opportunity simply because they experienced a medical emergency,” she said in June.

Harris’ running mate, Minnesota Gov. Tim Walz, who has said his own family struggled with medical debt when he was young, signed a state law in June cracking down on debt collection.

CFPB officials said the regulations would be finalized early next year. Trump hasn’t indicated if he’d follow through on the medical debt protections. In his first term, the CFPB did little to address medical debt, and congressional Republicans have long criticized the regulatory agency.

If Harris prevails, many consumer groups want the CFPB to crack down even further, including tightening oversight of medical credit cards and other financial products that hospitals and other medical providers have started pushing on patients. These loans lock people into interest payments on top of their medical debt.

“We are seeing a variety of new medical financial products,” said April Kuehnhoff, a senior attorney at the National Consumer Law Center. “These can raise new concerns about consumer protections, and it is critical for the CFPB and other regulators to monitor these companies.”

Some advocates want other federal agencies to get involved, as well.

This includes the mammoth Health and Human Services department, which controls hundreds of billions of dollars through the Medicare and Medicaid programs. That money gives the federal government enormous leverage over hospitals and other medical providers.

Thus far, the Biden administration hasn’t used that leverage to tackle medical debt.

But in a potential preview of future actions, state leaders in North Carolina recently won federal approval for a medical debt initiative that will make hospitals take steps to alleviate patient debts in exchange for government aid. Harris praised the initiative.

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Desde 2021, en más de 20 estados se han promulgado nuevas leyes para frenar la facturación abusiva de los hospitales, ampliar la atención caritativa a los pacientes con ingresos más bajos y frenar a los recaudadores de deudas.

Los demócratas impulsaron la mayoría de las medidas. Pero estas iniciativas legislativas a menudo fueron aprobadas también con el apoyo de los republicanos. Incluso, en algunos estados, los legisladores republicanos lideraron los proyectos para ampliar la protección a los pacientes.

“Independientemente de cuál sea su partido político, independientemente de su origen… cualquier procedimiento médico importante puede llevar a las personas a la bancarrota”, dijo en una entrevista el presidente de la Cámara de Representantes de Florida, Paul Renner, un republicano conservador. “Este es un problema real”.

Renner, que ha liderado controversiales medidas para frenar el derecho al aborto y ampliar la pena de muerte en Florida, también encabezó este año un proyecto para limitar los casos en los que los hospitales podían enviar las cuentas impagas de los pacientes a agencias de cobros. Obtuvo el apoyo unánime de la Legislatura de Florida.

Las medidas bipartidistas adoptadas en otros estados han ido más lejos, prohibiendo que estas facturas médicas figuren en los informes crediticios de los consumidores y restringiendo la posibilidad de que los proveedores médicos embarguen las viviendas de los pacientes.

Según KFF Health News, unas 100 millones de personas en el país están agobiadas por algún tipo de deuda relacionada con la atención médica, lo que obliga a millones a utilizar sus ahorros, pedir segundas hipotecas o recortar los gastos en alimentos y otros artículos de primera necesidad. Una cuarta parte de quienes tienen deudas debían más de $5.000 en 2022.

“En la Legislatura, los republicanos parecen más abiertos a proteger a la gente de la deuda médica que de cualquier otro tipo de deuda”, opinó Marceline White, directora ejecutiva de Economic Action Maryland, una organización sin fines de lucro que ayudó a liderar los esfuerzos en ese estado para detener a los proveedores médicos que pretendían embargar los salarios de los pacientes de bajos ingresos. El proyecto de ley recibió el apoyo unánime de demócratas y republicanos.

“Parece existir un amplio consenso en que no se debe perder la casa o los ahorros de toda la vida por haberse enfermado”, dijo White. “Es un nivel básico de justicia”.

La deuda médica sigue siendo un tema controversial en Washington, donde la administración Biden ha impulsado varias iniciativas para abordar el problema, incluida una propuesta de reglamentación por parte de la Oficina de Protección Financiera del Consumidor (CFPB), que prohibiría que cualquier deuda médica aparezca en los informes de crédito de los consumidores.

La vicepresidenta Kamala Harris, que encabeza la iniciativa del gobierno contra la deuda médica, se ha referido a estas iniciativas en la campaña presidencial. Harris también ha pedido que se refuercen las medidas para ayudar a millones de estadounidenses a pagar su deuda médica.

El ex presidente Donald Trump no suele hablar de la deuda médica cuando hace campaña. Pero los congresistas republicanos han criticado la propuesta de la CFPB, que el presidente del Comité de Servicios Financieros de la Cámara, Patrick McHenry (del Comité Nacional Republicano), calificó de “extralimitación regulatoria”.

Sin embargo, el encuestador Michael Perry, que ha investigado ampliamente lo que opinan los estadounidenses sobre la atención médica, comentó que los votantes conservadores, que suelen desconfiar del gobierno, parecen ver la deuda médica de otra manera. “Creo que sienten que está todo tan en su contra que ellos, como pacientes, realmente no tienen voz”, explicó. “Las divisiones políticas que normalmente vemos, en esta cuestión simplemente no están presentes”.

Cuando los defensores de los consumidores de Arizona propusieron en las boletas electorales de 2022 una medida para limitar los tipos de interés de las deudas médicas, el 72% de los votantes se pronunció a favor de la iniciativa.

Del mismo modo, encuestas a nivel nacional han revelado que más del 80% de los republicanos y demócratas respaldan la implementación de límites en los cobros de deudas médicas y que se fijen requisitos más estrictos para que los hospitales ofrezcan ayuda financiera a los pacientes.

Perry sacó a relucir otro factor que puede estar impulsando el interés de ambos partidos por la deuda médica: la creciente desconfianza de los ciudadanos a medida que los sistemas de salud se hacen más grandes y actúan como grandes corporaciones. “Los hospitales ya no son lo que eran”, dijo. “Eso está dejando claro que el lucro y la codicia son los que están dirigiendo gran parte de la toma de decisiones”.

No obstante, no todos los esfuerzos estatales para hacer frente a la deuda médica han obtenido un amplio apoyo tanto de demócratas como de republicanos.

El año pasado, cuando Colorado se convirtió en el primer estado que prohibió la inclusión de las deudas médicas en los informes de crédito de los residentes, sólo un legislador republicano respaldó la medida.

Y en Minnesota un proyecto de ley similar se aprobó este año sin un solo voto del Partido Republicano.

En otros lugares, medidas igual de estrictas se han aprobado sin inconvenientes.

Por ejemplo en Illinois, este año, se votó por unanimidad en el senado estatal, y se aprobó por 109 votos a favor y dos en contra en la Cámara de Representantes, un proyecto de ley que prohíbe el reporte de deuda médica en los informes de crédito.

En Rhode Island ningún legislador del Partido Republicano se opuso a la prohibición del reporte de crédito.

Finalmente, cuando la Legislatura de California examinó un proyecto de ley de 2021  para exigir a los hospitales del estado que proporcionen más asistencia financiera a los pacientes, la propuesta fue aprobada por 72 votos a favor y ninguno en contra en la Asamblea estatal y por 39 a 0 en el Senado.

Incluso algunos estados conservadores, como Oklahoma, han tomado medidas, aunque más modestas. Una nueva ley prohíbe a los proveedores médicos reclamar deudas a los pacientes si no han hecho públicas sus tarifas. La resolución, firmada por el gobernador republicano del estado, fue apoyada por unanimidad.

Steve Neville, senador republicano por Nuevo México, que respaldó una ley para restringir los cobros abusivos a pacientes de bajos ingresos en ese estado, dijo que simplemente estaba siendo pragmático.

“No era muy beneficioso dedicar mucho tiempo a intentar cobrar a pacientes indigentes”, dijo Neville. “Si no tienen dinero, no tienen dinero”. Tres de los 12 senadores republicanos apoyaron la medida.

El tesorero estatal de Carolina del Norte, Dale Folwell, republicano que como legislador estatal encabezó en 2012 un intento para prohibir el matrimonio entre personas del mismo sexo, dijo que todos los funcionarios electos, sin que importe su partido, deberían preocuparse por el modo en que las deudas médicas están afectando a los pacientes.

“No importa si, como conservador, estoy diciendo estas cosas, o si Bernie Sanders está diciendo estas mismas cosas”, dijo Folwell, en referencia al senador liberal de Vermont. “Al fin y al cabo, todos deberíamos asumir la responsabilidad de defender a aquellos que permanecen invisibles ante la sociedad”.

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New laws to curb aggressive hospital billing, to expand charity care for lower-income patients, and to rein in debt collectors have been enacted in more than 20 states since 2021.

Democrats championed most measures. But the legislative efforts often passed with Republican support. In a few states, GOP lawmakers led the push to expand patient protections.

“Regardless of their party, regardless of their background … any significant medical procedure can place people into bankruptcy,” Florida House Speaker Paul Renner, a conservative Republican, said in an interview. “This is a real issue.”

Renner, who has shepherded controversial measures to curb abortion rights and expand the death penalty in Florida, this year also led an effort to limit when hospitals could send patients to collections. It garnered unanimous support in the Florida Legislature.

Bipartisan measures in other states have gone further, barring unpaid medical bills from consumer credit reports and restricting medical providers from placing liens on patients’ homes.

About 100 million people in the U.S. are burdened by some form of health care debt, forcing millions to drain savings, take out second mortgages, or cut back on food and other essentials, KFF Health News has found. A quarter of those with debt owed more than $5,000 in 2022.

“Republicans in the legislature seem more open to protecting people from medical debt than from other kinds of debt,” said Marceline White, executive director of Economic Action Maryland, which helped lead efforts in that state to stop medical providers from garnishing the wages of low-income patients. That bill drew unanimous support from Democrats and Republicans

“There seems to be broad agreement that you shouldn’t lose your home or your life savings because you got ill,” White said. “That’s just a basic level of fairness.”

Medical debt remains a more polarizing issue in Washington, where the Biden administration has pushed several efforts to tackle the issue, including a proposed rule by the Consumer Financial Protection Bureau, or CFPB, to bar all medical debt from consumer credit reports.

Vice President Kamala Harris, who is spearheading the administration’s medical debt campaign, has touted the work on the presidential campaign trail while calling for new efforts to retire health care debt for millions of Americans.

Former President Donald Trump doesn’t typically talk about medical debt while stumping. But congressional Republicans have blasted the CFPB proposal, which House Financial Services Committee Chairman Patrick McHenry (R-N.C.) called “regulatory overreach.”

Nevertheless, pollster Michael Perry, who has surveyed Americans extensively about health care, said that conservative voters typically wary of government seem to view medical debt through another lens. “I think they feel it’s so stacked against them that they, as patients, don’t really have a voice,” he said. “The partisan divides we normally see just aren’t there.”

When Arizona consumer advocates put a measure on the ballot in 2022 to cap interest rates on medical debt, 72% of voters backed the initiative.

Similarly, nationwide polls have found more than 80% of Republicans and Democrats back limits on medical debt collections and stronger requirements that hospitals provide financial aid to patients.

Perry surfaced something else that may be driving bipartisan interest in medical debt: growing mistrust as health systems get bigger and act more like major corporations. “Hospitals aren’t what they used to be,” he said. “That is making it clear that profit and greed are driving lots of the decision-making.”

Not every state effort to address medical debt has garnered broad bipartisan support.

When Colorado last year became the first state to bar medical debt from residents’ credit reports, just one Republican lawmaker backed the measure. A Minnesota bill that did the same thing this year passed without a single GOP vote.

But elsewhere, similarly tough measures have sailed through.

A 2024 Illinois bill to bar credit reporting for medical debt passed unanimously in the state Senate and cleared the House of Representatives 109-2. In Rhode Island, not a single GOP lawmaker opposed a credit reporting ban.

And when the California Legislature took up a 2021 bill to require hospitals in the state to provide more financial assistance to patients, it passed 72-0 in the state Assembly and 39-0 in the Senate.

Even some conservative states, such as Oklahoma, have taken steps, albeit more modest. A new law there bars medical providers from pursuing patients for debts if the provider has not publicly posted its prices. The measure, signed by the state’s Republican governor, passed unanimously.

New Mexico state Sen. Steve Neville, a Republican who backed legislation to restrict aggressive collections against low-income patients in that state, said he was simply being pragmatic.

“There was not much advantage to spending a lot of time trying to do collections on indigent patients,” Neville said. “If they don’t have the money, they don’t have the money.” Three of 12 GOP senators supported the measure.

North Carolina state Treasurer Dale Folwell, a Republican who as a state legislator spearheaded a 2012 effort to ban same-sex marriage, said all elected officials, no matter their party, should care about what medical debt is doing to patients.

“It doesn’t matter if, as a conservative, I’m saying these things, or if Bernie Sanders is saying these things,” Folwell said, referencing Vermont’s liberal U.S. senator. “At the end of the day, it should be all our jobs to advocate for the invisible.”

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Severely injured after the crash, Burke was airlifted from the Fort Liberty U.S. Army base in North Carolina to UNC Medical Center, in Chapel Hill, where doctors performed surgeries to rebuild his leg.

Medicaid covered most of the cost, but Burke was still left with more than $10,000 in bills. He was confined to a wheelchair for two years after the accident, unable to work his car sales job. As a result, he said, he couldn’t pay the outstanding hospital bill and his account was turned over to a collection agency.

Since then, he and his wife repeatedly tried to buy a house. But because of damage to his credit score, mortgage companies repeatedly turned them down.

“We were forced into homelessness for a time,” said Burke, whose family moved from North Carolina to Missouri in 2020. “For everything we need credit for, we’re screwed.”

Burke is among millions of people burdened by medical debt, a nationwide problem that surveys and data suggest is particularly acute in North Carolina.

Using credit bureau data, the nonprofit Urban Institute calculated that more than 8% of North Carolina consumers had an unpaid medical bill on their credit report in 2023, compared with 5% nationally.

In fact, only Oklahoma, Wyoming, South Carolina, and Texas had higher levels of medical debt on credit reports than North Carolina, researchers found.

Nationally, 41% of adults — or about 100 million people — have some kind of health care debt, according to a 2022 survey by KFF, a health information nonprofit that includes KFF Health News.

The KFF survey was designed to capture not just bills patients couldn’t afford and that end up on credit reports, but also other debt patients incur to pay for health care, including from credit cards, payment plans, and loans from friends and family.

The KFF survey didn’t include state-specific findings, but if North Carolina’s debt burden precisely matched the national rate — meaning 41% of adults in the state had health care debt — then approximately 3.4 million North Carolinians would be in debt.

This is probably a low estimate, however, since the credit bureau data and other sources suggest that medical debt is higher in North Carolina than nationally.

The credit bureau data also indicates that medical debt is highest in Anson and Cleveland counties, along with a band of counties in the eastern part of the state.

Mecklenburg County’s rate is slightly higher than the state rate. And as is the case nearly everywhere, there are large racial disparities in medical debt, with debt burdens in the county more than twice as high in nonwhite communities as in white ones, the Urban Institute data shows.

Burke, who earns less than $1,000 a month from Social Security Disability Insurance, said his family is now forced to rent, which has dramatically increased their living expenses.

His family of five shares tight quarters — a 980-square-foot rental home with just two full-sized bedrooms. They moved to Missouri because the cost of living is lower there.

Hospitals, he said, need to change their priorities.

“They’re not for patient care,” he said. “They’re for patient profit.”

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But as Cooper stood by the stairs of the executive mansion and called for “freeing people from medical debt,” the future of his administration’s work hung in the balance.

Negotiations were fraying between the state and the powerful hospital industry over the plan to make hospitals relieve patient debt or lose billions of dollars of public funding tied to the state’s Medicaid expansion. The federal government hadn’t signed off on North Carolina’s plan, putting funding at risk. And not a single hospital official stood with the governor that day.

Less than six weeks later, the gamble paid off. The state received a federal blessing. And every one of North Carolina’s 99 hospitals agreed to the state’s demands.

In exchange for federal money, hospitals would wipe out billions of dollars of patient debt and adopt new standards to shield patients from crippling bills.

“It’s a model that the rest of the country could adopt,” said Jared Walker, founder of Dollar For, a national nonprofit that helps patients get financial aid from hospitals. “This is what we’ve been fighting for.”

But it was no sure thing. The behind-the-scenes story of North Carolina’s effort — based on hundreds of pages of public records and interviews with state officials and others involved — reveals a months-long struggle as the state went toe-to-toe with its hospitals.

Multibillion-dollar health systems and the industry’s powerful trade group vigorously fought the medical debt plan, records show. They sowed fears of collapsing rural health care. They warned of legal fights and a showdown with the legislature. And they maneuvered to get the federal government to kill the plan.

The Cooper administration had powerful allies in Washington, though. The Biden administration — and Vice President Kamala Harris specifically — had made reducing medical debt a priority. And in the end, the state held the highest card: money.

Building on Medicaid Expansion

North Carolina’s new path was paved by years of frustration.

The state has long had among the highest rates of medical debt in the nation. As many as 3 million adults likely carry such debt, KFF polling and credit bureau data suggest.

Debt is highest in nonwhite communities and in eastern North Carolina, credit bureau data analyzed by the nonprofit Urban Institute shows. And while some debts may be small, the KFF poll found that at least a quarter of people nationally with debt owe more than $5,000.

North Carolina hospitals also have been aggressive debt collectors, taking thousands of patients to court, placing liens on homes, and garnishing tax refunds.

The largest system, Atrium Health — part of Advocate Health, a multistate tax-exempt conglomerate that reported more than $31 billion in revenue and $2.2 billion in profit last year — sued almost 2,500 patients from 2017 to 2022, a report found.

On Thursday, Advocate Health announced that it will cancel the liens it placed on more than 11,000 homes.

Officials from Atrium and 14 other hospital systems declined to be interviewed about the debt plan.

Hospitals have beaten back efforts to restrict their aggressive billing. While an ambitious bill to expand patient protections attracted bipartisan support in the general assembly, it stalled last year in the face of industry opposition.

“Hospitals are good lobbyists,” the governor said in a recent interview. “They’re able to often stop legislation they don’t like.”

In 2023 the health care landscape in the state shifted. After years of resistance, GOP leadership in the legislature agreed to expand eligibility for Medicaid, the safety net insurance program.

The expansion promised to make coverage available to hundreds of thousands of previously uninsured low-income residents and to protect them from going into debt.

But as Cooper, a Democrat, and his top health official, Kody Kinsley, traveled the state to celebrate coverage gains, they saw a gap. The expansion didn’t help people who’d already racked up big bills. “They were still carrying the burden of that debt,” Kinsley said.

With one more year in office, Cooper and Kinsley, whose interest in medical debt was colored by being the child of working-class parents, resolved to take a final shot at the debt problem.

“It’s just a metastasized disease in the health system,” Kinsley said. “And going after it is just a tangle of thorns.”

Medicaid expansion offered a means, albeit untested, to do that, they believed.

The expansion would come with billions of dollars of new federal funding for hospitals through an arcane process known as a state-directed payment. This funding — which many states access to compensate hospitals for treating low-income patients — is criticized by some experts as excessive.

Rather than reject the money, however, Noth Carolina officials believed they could leverage it. Instead of giving it away with no strings attached, they asked, what if they made hospitals protect patients from medical debt in exchange for the funds? If hospitals wouldn’t, the state would dock their money.

“It was a clear tool that we now had on the table,” said Kinsley, who oversaw development of the debt plan and negotiations with hospitals and the federal government.

Many hospital systems in North Carolina stood to get nearly twice as much money by agreeing to participate in the debt relief plan, state figures show. Charlotte-based Atrium, for instance, would get about $1.7 billion next year, compared with roughly $900 million if it didn’t sign on.

But the added money would come with a catch.

Seeking Trusted Partners

Kinsley and his aides quickly settled on two things to demand from health systems.

Hospitals would have to eliminate outstanding debts of their low-income patients. This approach had been pioneered by New York-based nonprofit Undue Medical Debt, which buys old debt for pennies on the dollar and retires it.

Hospitals would also have to change their financial aid policies so more patients could get help with big bills and fewer would go into debt.

Most hospitals already offer discounts to low-income patients. But standards vary, and many hospitals make it difficult to apply for assistance. To address this, some states have imposed uniform standards on hospitals.

North Carolina state officials wanted the same. They knew, however, that threatening hospital money would stir opposition from the industry’s lobbying arm, the influential North Carolina Healthcare Association.

So Kinsley and his aides reached out directly to a handful of hospital systems, including UNC Health, the nonprofit system affiliated with the state’s public university system. “We were essentially road-testing what the actual policies could be and how they would work,” Kinsley said.

Through the first months of 2024, state officials took pains to keep the conversations confidential, emails obtained through a public records request show. When Kinsley’s aides provided drafts to hospital officials, they asked that the proposals be shared “with only a few select colleagues.”

State and hospital officials went back and forth over which patients should qualify for free or discounted care, how to relieve old patient debts, and how to better screen patients for aid.

The process convinced state officials that their plan would work. Some hospitals had already retired patients’ debts. Others had financial assistance policies that paralleled the standards the state was contemplating.

“We had sought out hospitals of different shapes and sizes,” Kinsley said. “We had gleaned from other states what the best practices were and what was really workable.”

‘A Total Explosion’

Then in late April, word of the negotiations between the state and the select group of hospitals leaked.

Kinsley said his cellphone lit up. “Everybody freaked out,” he recalled. “Every lobbyist was coming after me. It was just a total explosion.”

Among them was the North Carolina Healthcare Association and its veteran chief executive, Steve Lawler, who began peppering Kinsley’s office with sharply worded letters attacking the medical debt plan and predicting dire consequences.

Lawler warned that patients would face higher insurance costs. Moreover, he alleged it was illegal to use federal Medicaid dollars to force hospitals to provide widespread debt relief.

“Such a trade-off is not permissible,” Lawler wrote on May 2.

Days later, Kinsley fired back a long letter to Lawler, saying that the plan was a legally sound effort to address a crisis that was “harming our neighbors.”

But the damage had been done. The hospitals working with the state changed their tone, and the industry closed ranks.

Meanwhile the hospital association made plans to convene a meeting with health insurers and business leaders to discuss medical debt, an approach that threatened to slow the state effort to hold hospitals singularly accountable. The group met at Ruth’s Chris Steak House in Raleigh, a restaurant where a steak costs $60 and up.

In a recent interview, Lawler said the hospital group was just trying to build consensus for a different strategy for tackling medical debt. “This was a big enough issue that it just required a bigger-tent conversation,” he said.

To state officials, it looked like an industry play to derail the medical debt plan. “I didn’t know if it was going to fall apart,” Kinsley said.

Pressing Ahead

For lower-income residents, the stakes were high.

The state’s program was designed to erase around $4 billion in hospital debt for nearly 2 million people dating to 2014, according to state estimates.

If approved, the plan would also require hospitals to automatically qualify more patients for charity care, provide discounts to low- and middle-income patients, and stop reporting these patients to credit agencies if they couldn’t pay.

So despite the pushback, state officials kept up their dialogue with hospitals and made revisions to address some concerns, records show.

Among the concessions, the state proposed that hospitals offer debt relief to patients with incomes below 3½ times the federal poverty level, or $109,200 for a family of four. The state had initially sought to mandate aid for people making less than four times the poverty level.

State officials also secured a legal opinion from a Medicaid expert in Washington, D.C., who confirmed that the state’s approach wouldn’t run afoul of federal rules.

But time was running out. The state needed to submit its plan by the end of June or risk losing the federal money. And Cooper and Kinsley still wanted at least a few hospitals on board to build momentum.

“The win here would be hospitals and the department solving a problem that was real and meaningful for people, and we could walk out together and say this is what we got done,” Kinsley said in an interview later.

Email records indicate that some systems, such as Cone Health, considered joining Kinsley and the governor when they announced the plan July 1.

None did. And by the following week, the state was barraged by letters from hospitals across the state lambasting the medical debt plan.

Ken Haynes, a senior Atrium official, wrote that the proposal would set “a dangerous precedent” and warned that insurance companies would raise deductibles, knowing that hospitals would have to forgive bills for many patients.

Novant Health, a large nonprofit system with seven hospitals in and around Charlotte, argued that financial assistance should be limited to uninsured patients and those with Medicaid. “Policies should avoid broad debt relief approaches that divert scarce hospital resources,” wrote Alice Pope, the system’s chief financial officer.

In 2023, Novant posted $8.3 billion in revenue and more than $460 million in profit.

New Bern-based CarolinaEast Health System, insisted the plan would “cripple rural healthcare organizations.” Granville Health System, which runs a community hospital in the center of the state, contended that “hospitals are being used as pawns to achieve preferred political and policy objectives on questionable legal authority.”

In mid-July, Lawler at the North Carolina Healthcare Association wrote directly to the head of the federal Centers for Medicare & Medicaid Services, urging it to reject the state’s plan. Lawler said the plan “set a dangerous precedent” by linking Medicaid funding to medical debt policy.

Dominoes Fall

But North Carolina officials maintained close contact with the federal agency, giving them confidence they’d get the green light, despite hospital opposition.

On July 26, approval came through, a month and a day after North Carolina submitted the plan. Federal review of state plans can often take three or four times as long.

The state gave hospitals until 5 p.m. on Friday, Aug. 9, to accept the new medical debt standards or forfeit billions of dollars.

By Aug. 7, only 37 of the state’s 99 hospitals had signed on.

Then the tide shifted. By Friday evening, state officials had locked in all 99.

Implementing the plan promises to be complicated, with logistical challenges, wary Republicans in the legislature, and hospitals smarting over the showdown. And, as state leaders acknowledge, more action is needed to constrain high prices hospitals still command.

But with taxpayers pumping billions of dollars into health systems nationwide, North Carolina’s gambit offers a potential road map for leveraging public funds to confront a crisis that burdens some 100 million people in the U.S.

“North Carolina has been really strategic in using the lever of its Medicaid payments,” said Christopher Koller, president of the Milbank Memorial Fund, a health policy nonprofit. “The focus of health systems should be caring for patients, not bullying them for every last penny to run their business.”

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But there’s an important difference about this clinic in central Alabama: No one gets a bill, including for prescriptions.

That’s because the clinic is owned by a manufacturing company with a specific agenda. “We don’t want you to spend money on health care,” said Russell DuBose, vice president of human resources at Phifer.

Phifer, a global manufacturer of window screens, opened the clinic five years ago in a bid to control its health care costs and stop big medical bills from driving its workers into debt. The strategy has paid big dividends. Phifer has saved so much on health care that the company was able to open a free summer camp for the children of employees.

Workers have dramatically boosted retirement savings, too. And Phifer is now adding chiropractic care and orthotics, all at no cost to workers.

Benefits like these remain out of reach for most U.S. workers, millions of whom drain savings, take out second mortgages, or cut back on food and other essentials to stay ahead of health care debt. Overall, about 100 million people in the U.S. are burdened by some form of this debt, KFF Health News has found.

Many of those people have health plans through employers who, unable to control their health care costs, now force workers to pay thousands of dollars out-of-pocket when they go to a doctor. Phifer has shown there’s another way. The company not only saved itself money, it’s sharing the benefits with workers and shielding them from debt.

“It’s really remarkable,” said Shawn Gremminger, president of the National Alliance of Healthcare Purchaser Coalitions, which works with employers on improving health benefits.

“If I had to point to a single employer in our network that’s been the most aggressive tackling this problem and coming up with the most innovative solutions,” he said, “it’s a relatively small, privately owned manufacturer in a small town in the South.”

‘Unacceptable’ Health Costs

Phifer is a family-owned company founded after World War II by a former pilot. J. Reese Phifer saw an opportunity to turn aluminum produced for the war effort into window screens for America’s booming suburbs.

Today Phifer still makes screens at a cavernous plant outside Tuscaloosa that stretches over more than 34 acres of factory floor. Inside, massive rolls of aluminum coil are unwound, stretched, and spun on rows of spools and looms. Elsewhere, fiberglass is woven into material for window shades, patio furniture, and other products.

Business has been good for the company, which employs about 2,000 people and operates plants in Alabama and overseas. A few years ago, though, Phifer noticed its workers weren’t saving enough for retirement. The culprit was medical bills.

“Copays, coinsurance, cost sharing. All these things were taking money away from our plan members,” DuBose said. “The amount of money employees were having to spend on health care was unacceptable.”

That’s not unusual. Most U.S. workers and their families are in a health plan with significant cost sharing, requiring they pay thousands of dollars out-of-pocket before coverage kicks in.

The average deductible for an employer-provided health plan now exceeds $1,500, data shows. And for family plans, deductibles can be several times that. That’s a big reason health care debt is such a big problem, even for people with health coverage.

For Phifer, which relies on skilled workers to operate its machines, reducing employees’ financial stress became a priority, DuBose said. “When you have somebody who wants to be here every day, wants to be here every year,” he said, “they can do some pretty awesome stuff.”

Removing Barriers

Phifer landed on a deceptively simple idea: Make it easier — and cheaper — for workers to see a doctor and fill a prescription. That, the company reasoned, could improve employee health and control costly complications.

The cornerstone of this plan was the PhiferCares Clinic and pharmacy.

The company set up the clinic in a small park and recreation space Phifer owned down the road from the factory. It contracted with a local health system to provide the physician and nurses. Inside is a small pharmacy.

At no cost, employees and their families can go in for basic primary care, including checkups, vaccinations, and help managing chronic illnesses like diabetes. “It’s almost a concierge service,” DuBose said.

Phifer did something else, too. It directs patients to specialists and hospitals with the highest quality ratings. That can save money for patients and the company. Workers who choose one of these providers typically don’t get a bill.

That kind of no-cost access makes a huge difference, said Ronald Lewis, who visited the PhiferCares Clinic recently for a checkup.

“I’m saving thousands of dollars, easy. Easy $3,000,” said Lewis, whose wife works at the plant. “All you’ve got to do is come in, make an appointment, and they come in and see you. … It is a life-changer.”

The clinic has helped Lewis lose weight and keep his blood pressure in check. A doctor also caught early signs of prostate cancer.

Cherry Wilson, who has worked on a production line at Phifer since 2017, said she still has medical debt from a gallbladder surgery she had before she joined the company. But when she broke her foot more recently and got surgery from a preferred specialist, there were no medical bills. “I don’t pay anything here,” she said.

Big Dividends

Other companies have experimented with workplace clinics with mixed results.

Running a medical office can be expensive. The strategy may not work if employees aren’t centrally located or if employee turnover is high. And savings can take a while to materialize. But research on employer health benefits has shown that reducing how much workers pay for primary care and prescription drugs yields better outcomes for workers and can save everybody money.

Phifer is reaping rewards.

Despite years of high inflation nationally, the company’s net spending on health care was lower in 2023 than in 2019, declining from $15.8 million to $14.9 million in constant dollars, according to data provided by DuBose.

The cost of the company’s most popular health plan — which comes with no deductible and includes dental benefits — is lower, as well. Phifer workers pay $394 a month for this family plan. By comparison, workers nationally contribute $548 monthly on average for family coverage that typically comes with a sizable deductible.

“We’ve seen the power of prevention,” DuBose said.

With savings from its health care strategy, Phifer opened the summer camp last year. And the company is offering college scholarships to workers’ children.

Workers are saving more, too. About 90% are hitting their retirement goals, DuBose said, up from around 75% five years ago.

The protections from big medical bills have had another benefit, said Jerry Wheat, who has worked for Phifer for 38 years and runs a production line for fiberglass screens.

“It makes you want to take care of yourself and do better for the company,” Wheat said. “If somebody’s going to take care of you, don’t you want to take care of them? That’s the way I look at it. But I’m old-school.”

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Si se promulgan, estas reglas ampliarían drásticamente las protecciones para decenas de millones de estadounidenses agobiados por facturas médicas que no pueden pagar.

Las regulaciones también cumplirían con una promesa de la administración Biden de abordar el flagelo de la deuda de atención médica, un problema que se presenta solo en Estados Unidos y que afecta a unas 100 millones de personas, obligando a muchos a hacer sacrificios como reducir la compra de alimentos, ropa y otros artículos esenciales.

“A nadie debería negársele el acceso a oportunidades económicas simplemente porque experimentó una emergencia médica”, dijo el martes 11 de junio la vicepresidenta Kamala Harris.

La administración también pidió a los estados que los hospitales aumenten los esfuerzos para restringir la cobros de deudas y que estos centros de salud proporcionen más atención caritativa a los pacientes de bajos ingresos, un paso que podría evitar que más personas terminen con deudas médicas.

Harris también instó a los gobiernos estatales y locales a continuar comprando y eliminando la deuda médica, una estrategia que se ha vuelto cada vez más popular en todo el país.

Reportar a las agencias de crédito, una amenaza tradicionalmente utilizada por los proveedores médicos y los cobradores de deudas para inducir a los pacientes a pagar sus facturas, es la táctica más común utilizada por los hospitales para cobrar sus deudas, según un análisis de KFF Health News.

Aunque una sola factura impaga en un informe de crédito puede no afectar enormemente a algunas personas, el impacto puede ser devastador para aquellos con grandes deudas de atención médica.

Por ejemplo, hay evidencia creciente de que los puntajes de crédito afectados por la deuda médica pueden amenazar el acceso de las personas a la vivienda y aumentar el riesgo de dejarlas sin techo.

Las personas con bajos puntajes de crédito también pueden tener problemas para obtener un préstamo o pueden verse obligadas a pedir prestado a tasas de interés más altas.

“Hemos escuchado historias de personas que no pudieron conseguir trabajos porque su deuda médica estaba afectando su puntaje de crédito y tenían un puntaje bajo”, dijo Mona Shah, directora senior de Community Catalyst, una organización sin fines de lucro que ha presionado por una mayor protección contra la deuda médica.

Shah dijo que las regulaciones propuestas tendrían un gran impacto en la seguridad financiera y la salud de los pacientes. “Esto es algo realmente importante”, dijo.

Funcionarios de la administración dijeron que planean revisar los comentarios públicos sobre su propuesta durante el resto de este año y emitir una regla final a principios de 2025.

Los investigadores de la CFPB han hallado que la deuda médica, a diferencia de otros tipos de deuda, no predice con precisión la solvencia crediticia de un consumidor, cuestionando la utilidad de incluirla en un informe de crédito.

Las tres agencias de crédito más grandes —Equifax, Experian y TransUnion— dijeron que ya no incluían algunas deudas médicas en los informes de crédito desde el año pasado. Las deudas excluidas incluían facturas pagadas y aquellas de menos de $500.

Esas acciones han reducido sustancialmente el número de personas con deudas médicas en sus informes de crédito, según muestran datos del gobierno. Pero las acciones voluntarias de las agencias dejaron fuera a muchos pacientes con facturas médicas más grandes en sus informes de crédito.

Un informe reciente de la CFPB halló que 15 millones de personas todavía tienen estas facturas en sus informes de crédito, a pesar de los cambios voluntarios. Según este informe, muchas de estas personas viven en comunidades de bajos ingresos en el sur.

Las reglas propuestas no solo prohibirían que las futuras facturas médicas aparezcan en los informes de crédito, sino que también eliminarían las deudas médicas que ya están en los informes, según funcionarios de la administración.

Los oficiales dijeron que las deudas que ya no estarán en los informes no solo incluirían facturas médicas sino también cuentas dentales, una fuente importante de deuda de atención médica en el país.

Aunque las deudas no aparecerían en los puntajes de crédito, los pacientes aún las deberán. Eso significa que hospitales, médicos y otros proveedores aún podrían usar otras tácticas de cobros para intentar que los pacientes paguen, incluyendo llevar los casos a los tribunales.

Los pacientes que usaron tarjetas de crédito para pagar facturas médicas, incluidas las tarjetas de crédito médicas como CareCredit, también continuarán viendo esas deudas en sus puntajes de crédito ya que no estarían cubiertas por la regulación propuesta.

Líderes de hospitales y representantes de la industria del cobro de deudas han advertido que restringir el reporte de crédito puede tener consecuencias no deseadas, como inducir a más hospitales y médicos a exigir pagos por adelantado antes de brindar atención.

Pero defensores de consumidores y pacientes continúan pidiendo más acción. El Centro Nacional de Derecho del Consumidor, Community Catalyst y unos 50 otros grupos enviaron cartas el año pasado a la CFPB y al IRS instando a una acción federal más fuerte para controlar los cobros de las deudas hospitalarias.

Los líderes estatales también han tomado medidas para ampliar las protecciones al consumidor. En los últimos meses, un número creciente de estados, liderados por Colorado y Nueva York, han promulgado legislaciones que prohíben que la deuda médica se incluya en los informes de crédito de los residentes o se tenga en cuenta en sus puntajes de crédito. Otros estados, incluido California, están considerando medidas similares.

Muchos grupos también están instando al gobierno federal a prohibir que los hospitales exentos de impuestos vendan la deuda de los pacientes a empresas que compran deudas, o nieguen atención médica a personas con facturas atrasadas, prácticas que siguen siendo comunes en todo Estados Unidos, según comprobó KFF Health News.

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If enacted, the rules would dramatically expand protections for tens of millions of Americans burdened by medical bills they can’t afford.

The regulations would also fulfill a pledge by the Biden administration to address the scourge of health care debt, a uniquely American problem that touches an estimated 100 million people, forcing many to make sacrifices such as limiting food, clothing, and other essentials.

“No one should be denied access to economic opportunity simply because they experienced a medical emergency,” Vice President Kamala Harris said Tuesday.

The administration further called on states to expand efforts to restrict debt collection by hospitals and to make hospitals provide more charity care to low-income patients, a step that could prevent more Americans from ending up with medical debt.

And Harris urged state and local governments to continue to buy up medical debt and retire it, a strategy that has become increasingly popular nationwide.

Credit reporting, a threat traditionally used by medical providers and debt collectors to induce patients to pay their bills, is the most common collection tactic used by hospitals, a KFF Health News analysis has shown.

Although a single unpaid bill on a credit report may not hugely affect some people, the impact can be devastating for those with large health care debts.

There is growing evidence, for example, that credit scores depressed by medical debt can threaten people’s access to housing and fuel homelessness. People with low credit scores can also have problems getting a loan or can be forced to borrow at higher interest rates.

“We’ve heard stories of individuals who couldn’t get jobs because their medical debt was impacting their credit score and they had low credit,” said Mona Shah, a senior director at Community Catalyst, a nonprofit that’s pushed for expanded medical debt protections for patients.

Shah said the proposed regulations would have a major impact on patients’ financial security and health. “This is a really big deal,” she said.

Administration officials said they plan to review public comments about their proposal through the rest of this year and hope to issue a final rule early next year.

CFPB researchers have found that medical debt — unlike other kinds of debt — does not accurately predict a consumer’s creditworthiness, calling into question how useful it is on a credit report.

The three largest credit agencies — Equifax, Experian, and TransUnion — said they would stop including some medical debt on credit reports as of last year. The excluded debts included paid-off bills and those less than $500.

Those moves have substantially reduced the number of people with medical debt on their credit reports, government data shows. But the agencies’ voluntary actions left out many patients with bigger medical bills on their credit reports.

A recent CFPB report found that 15 million people still have such bills on their credit reports, despite the voluntary changes. Many of these people live in low-income communities in the South, according to the report.

The proposed rules would not only bar future medical bills from appearing on credit reports; they would also remove current medical debts, according to administration officials.

Officials said the banned debt would include not only medical bills but also dental bills, a major source of Americans’ health care debt.

Even though the debts would not appear on credit scores, patients will still owe them. That means that hospitals, physicians, and other providers could still use other collection tactics to try to get patients to pay, including using the courts.

Patients who used credit cards to pay medical bills — including medical credit cards such as CareCredit — will also continue to see those debts on their credit scores as they would not be covered by the proposed regulation.

Hospital leaders and representatives of the debt collection industry have warned that restricting credit reporting may have unintended consequences, such as prompting more hospitals and physicians to require upfront payment before delivering care.

But consumer and patient advocates continue to call for more action. The National Consumer Law Center, Community Catalyst, and about 50 other groups last year sent letters to the CFPB and IRS urging stronger federal action to rein in hospital debt collection.

State leaders also have taken steps to expand consumer protections. In recent months, a growing number of states, led by Colorado and New York, have enacted legislation prohibiting medical debt from being included on residents’ credit reports or factored into their credit scores. Other states, including California, are considering similar measures.

Many groups are also urging the federal government to bar tax-exempt hospitals from selling patient debt to debt-buying companies or denying medical care to people with past-due bills, practices that remain widespread across the U.S., KFF Health News found.

About This Project

“Diagnosis: Debt” is a reporting partnership between KFF Health News and NPR exploring the scale, impact, and causes of medical debt in America.

The series draws on original polling by KFF, court records, federal data on hospital finances, contracts obtained through public records requests, data on international health systems, and a yearlong investigation into the financial assistance and collection policies of more than 500 hospitals across the country. 

Additional research was conducted by the Urban Institute, which analyzed credit bureau and other demographic data on poverty, race, and health status for KFF Health News to explore where medical debt is concentrated in the U.S. and what factors are associated with high debt levels.

The JPMorgan Chase Institute analyzed records from a sampling of Chase credit card holders to look at how customers’ balances may be affected by major medical expenses. And the CED Project, a Denver nonprofit, worked with KFF Health News on a survey of its clients to explore links between medical debt and housing instability. 

KFF Health News journalists worked with KFF public opinion researchers to design and analyze the “KFF Health Care Debt Survey.” The survey was conducted Feb. 25 through March 20, 2022, online and via telephone, in English and Spanish, among a nationally representative sample of 2,375 U.S. adults, including 1,292 adults with current health care debt and 382 adults who had health care debt in the past five years. The margin of sampling error is plus or minus 3 percentage points for the full sample and 3 percentage points for those with current debt. For results based on subgroups, the margin of sampling error may be higher.

Reporters from KFF Health News and NPR also conducted hundreds of interviews with patients across the country; spoke with physicians, health industry leaders, consumer advocates, debt lawyers, and researchers; and reviewed scores of studies and surveys about medical debt.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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