Decline in overall medical debt is positive; more work to be done 

New York, NY – Feb 15 – On Tuesday February 14^th the White House issued a Fact Sheet on the state of medical debt and recent progress to alleviate this national crisis. Fortunately, new data from the Consumer Financial Protection Bureau (CFBP) shows that 8.2 million less Americans have medical debt on their credit reports now compared to 2020.  

This is very welcome news, but underscores the need for a more robust system of data collection to understand the pervasiveness of medical debt.  Some medical debts are never reported to the credit agencies, are put on credit cards or are paid with borrowed funds from family and/or friends.  

The mental health consequences of medical debt are also essential to consider. Having debt, whether it’s being collected on or not, increases the likelihood someone struggles with depression or anxiety threefold and even perceived debts are associated with increased psychological distress, especially for the unemployed, female and those with low incomes. Black and Hispanic adults are, respectively, 50% and 35% more likely to have medical debt compared to white adults.  

Highlights from the Fact Sheet, include: 

• Municipalities around the country leveraging ARPA funds, in partnership with Undue Medical Debt (RIP), to abolish medical debt for those in financial need (examples include Cook County, Toledo, New Orleans, Pittsburgh and others)  
• Expanding Medicaid eligibility and making ACA plans more affordable and accessible 
• Increasing consumer protections for people struggling with medical debt [RIP’s previous statement here] 
• Providing medical debt relief options to low-income veterans and ceasing the reporting of medical debt to credit bureaus by the VA 
• Efforts to make loans and mortgages more accessible for those with medical debt impacting their credit scores  

“We are thrilled by the interest from states and municipalities to work with Undue on federally funded medical debt abolishment” shares Allison Sesso, Undue ’s CEO & president. “Along with our individual, corporate and nonprofit partners we’ve cleared the path for over five million families to start achieving financial and health security. We’ll continue to advocate for systems change that protects those in financial hardship and appreciate the administration’s continued work to improve health outcomes.”  

As a national nonprofit committed to ending the burden of medical debt, Undue welcomes findings that show how medical debt abolishment coupled with improvements in health coverage affordability are helping millions nationwide. Affordable, quality coverage is essential to reducing the harm of medical debt and there’s still much to do to tackle the billions of dollars in outstanding medical debt.   

The CFPB data provides a nice snapshot, but a deeper understanding of medical debt’s impact is necessary. A national, longitudinal study complete with robust data collection (beyond credit reporting) that assesses medical debt across loans, credit cards and borrowed/crowdfunded money is needed to get a full appreciation of the issue. Annual questions across various surveys (Federal Reserve Survey of Household Economics; Dept. of Labor; CDC, CMS) could address medical debt and the intersection of social determinants of health, insurance status and more.  

Finally, Undue urges the VA to presumptively abolish outstanding medical debts for all veterans in good standing.

Testimony from those whose medical debt has been abolished by Undue : 

• “In 2015 my daughter was diagnosed with a rare liver condition called Biliary Atresia. In 2016 she had a lifesaving liver transplant. During that time, we spent more time in the hospital than I can count. Our lives were turned upside down and we experienced extreme financial hardship. Our daughter is now 6 years old and thriving and we are slowly getting our bearings again. When I got this letter out of the mail and realized what it was, I immediately started crying. This is an incredibly, gracious gift and the fact that someone has done this out of the kindness of their heart is just amazing. Thank you, so very much.” — Gabrielle, AL 
• “The past few years have been rough. I lost my mom back in 2016 to cancer. I had intentions of resolving this debt but… I was unable to fulfill those obligations… Please accept my sincere thank you for the generosity that you have provided to me. God bless and thank you for helping in tough times.” — Daniel, IL 
• “I got really sick one year right after I lost my health insurance. I had no choice but to go to the emergency room, and I’m lucky I did because the doctor told me that the infection I ended up having could have been life threatening if I went any longer without care. I’m happy to still be here but sadly have a lot of medical debt. I was overjoyed and happy to receive a letter saying this generous organization took care of that debt. I can’t thank you enough!” — D.M., OH 

Undue continues to focus on its primary mission of uplifting those harmed by medical debt while advocating for upstream solutions and shining a light on the inequity of the issue, its root causes and the steps stakeholders can take to protect patients from a broken healthcare financing system.  

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Undue Medical Debt (RIP) is a national 501(c)(3) nonprofit that was founded in 2014 by two former debt collectors. To date Undue has acquired — and abolished — over $8.5 billion of burdensome medical debt, helping 5.5 million families and addressing a major social determinant of health. Undue purchases debts for a fraction of their face value in bundled portfolios and partners with individuals, faith-based organizations, government, foundations and corporations to empower donors by converting every dollar contributed into $100 of medical debt relief on average.    

Undue partners with hospitals and health systems and physician groups to acquire medical debt for abolishment. To learn more, visit: https://unduemedicaldebt.org