5 Astonishing Stats on Where Americans Are Drowning in Debt

Credit cards, mortgages and hefty auto loans are all debt problems in America, but the single biggest offender putting people in the red is the healthcare industry. Medical debt is the number one reason Americans file for bankruptcy. An astonishing number of people struggle to pay off their medical bills and often have to go into debt elsewhere because of them. Hefty medical bills could mean you have to take out a personal loan just to pay your rent, for example. But while the pervasiveness of medical debt in the United States is well-known, it is surprising just how the numbers actually shake out. Americans aren’t just in medical debt, we’re drowning in it.

1.   Medical insurance will make or break you

Health insurance coverage directly correlates with the percentage of Americans in debt. This in and of itself is not surprising, but what is astonishing is just how severe the connection is. The Urban institute has found that just a one percent increase in uninsured Americans can drive the amount of debt in collections up by 1.3 percent. This uneven ratio leads the average medical debt to increase exponentially compared to uninsurance rates.

2.   The South is hit the worst

Economic and demographic influences make a huge difference in the average debt an area suffers from. In the United States, southern states appear to be saddled with the most medical debts. While 1 in 5 Americans carries past due medical debts, southern states like Louisiana and Texas boast a much higher percentage, nearly 3 in 5.

3.   The Midwest carries the least debt

Minnesota boasts the lowest debt rates in the country with less than 17 percent of adults having outstanding debts in collections. Differences in health insurance coverage has been linked to these huge variances in regional indebtedness. Areas with higher levels of coverage see a lower level of debt in general, not just medical debt. This seems to create something of a cycle, where those most in need of medical insurance are those unable to afford it.

4.   The median debt is 1,500 dollars

The median amount of past due debts in the United States is well over the 1,000 dollar mark. This means that half of debtors owe less, and half owe more. Medical debts in isolation carry a median amount of just under 700 dollars.

5.   This medical debt has little payoff

Medical bills are considered by most people to be unavoidable. Being in medical debt is rarely the fault of poor planning or laziness. It is an unfortunate situation that strikes some people but not others, depending on circumstance and pre-existing health issues. But all these high costs don’t seem to be paying off for Americans, who pay the most in health care yet can expect shorter lifespans when compared with other developed nations. It’s the apparent needlessness of these millions of dollars of medical debt that give these statistics their frustrating bite. So many people are drowning in unavoidable debt while reaping no visible benefits.

Debt versus collections

Measuring the prevalence of debt in the United States and trying to quantify how shocking it is can be tricky sometimes. You’d be hard pressed to find many adults without some debt in the form of a mortgage or an auto loan. These are normal aspects of life that most everyone can count on dealing with for at least a few years. However, by some standards an otherwise financially healthy individual is “in debt” if they do not yet own their home outright. This is why many institutions choose to look at past-due debts and measure only the debt that has gone into collections. This provides a much clearer look of just how many people are actually struggling to make ends meet. Because medical debts are unsecured, meaning they hold no collateral, they are often one of the first debts people miss payments on.

Looking at the numbers and factoring in only past due debts leads to smaller percentages. For example, considering debt that is not in collections leads to nearly 80 percent off all Americans being in debt. But if we consider just those who have debt in collections, as we have here, then we get a better picture of just how many people are truly struggling with debt, and the numbers are not comforting.

Medical debts are the most frightening kind, because they cannot be easily avoided. The best you can do is assume that a medical emergency will strike eventually, and save money as best you can with that in mind. And if medical insurance is at all within your reach, do not rest until you have gotten yourself enrolled.



Christine Yaged is a co-founding partner and Chief Product Officer of FinanceBuzz. Christine launches and scales brands. She is passionate about technology, digital marketing, and people.

6 Comments Add yours

  1. So important and extremely alarming. It’s a crime that what many consider to be the richest nation on earth is actually one of the worst for taking care of its own people and their health needs. The recent destruction of national health care by this president and his Republican cohorts was born out of their pure hatred of everything President, Obama —with no replacement plan despite their claims to the contrary. The support for this overturning of healthcare by those who either can afford it or who have it provided for them through their employment only proves the kind of ignorance that pervades the minority thinking (or lack thereof) of those folks who are reasonably healthy and currently protected. Bringing to mind the saying, “There but by the grace of God go I.” They may one day lose their job and thereby, their healthcare — while the wealthy could care less. All the same, personal debt due to the majority of Americans being unable to obtain reasonably priced healthcare continues to plunge Americans into the unthinkable — dying for the lack of it. Cutting back on medication desperately needed, avoiding a trip to the emergency room because of being unable to afford it, and preemptive visits to a doctor simply because people don’t have healthcare creates a nation of sick and tired people. Sick because they fall ill unable to protect themselves due to the unreasonable cost for healthcare, and tired because of politicians (primarily greedy Republicans) who receive better than adequate healthcare from them, the taxpayers! Outrageous, doesn’t even begin to describe these self-serving do-nothings who sit on Capitol Hill. Granted, the watered-down version of healthcare that President Obama was forced to push through (watered down by Republicans) in order to help many Americans (including the elderly and those with pre-existing conditions) was not perfect and had many aspects to improve upon, but it beat having nothing at all. Let’s face it, everyone gets old — if they’re not already taken by disease — and with age comes unimaginable health problems, so no one is immune (with the exception of politicians) to this inevitable outcome — and eventually, those who are young now. There is no excuse for this prolonged problem to exist in America, none. And screaming that it would be socialized medicine, too much government meddling, and too expensive is not a solution that American citizens can live with — while politicians benefit off the backs of the taxpayer and it is all born from corruption at the highest levels — from the government, insurance companies, and the many greedy pharmaceutical companies.

    Liked by 1 person

  2. Michelle says:

    This is very informative. It quite scary how much debt there is in America. We work with a budget, but so many people spend money like there’s no tomorrow.


  3. zadi says:

    Very interesting and actually alarming article, thanks for sharing

    Liked by 1 person

    1. Kally says:

      Thank you for loving this article

      Liked by 1 person

      1. zadi says:

        You are very welcome dear

        Liked by 1 person

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