According to a recent analysis by the Urban Institute, over a quarter of adults in the U.S. reported dealing with medical debt as of December 2025. Specifically, 26.6% indicated that they or their family members owed money related to medical expenses, which includes 15.4% who had unpaid medical bills they felt unable to pay.
Experts have pointed out that skyrocketing hospital costs and a lack of competition in the healthcare system are exacerbating medical debt for many Americans. Sally Pipes, president of the Pacific Research Institute, noted a dramatic rise in hospital prices—over 220% from 2000 to 2022—far outpacing overall inflation.
She continued, emphasizing that the consolidation of health systems means that patients see limited choices and higher prices. In nearly half of metropolitan areas, one or two health systems dominated the hospital market in 2024, which, understandably, diminishes competition and keeps costs high. It’s perhaps not surprising that a significant portion of those with medical debt owe it to hospital services.
A report from the White House Council of Economic Advisers, released in June, suggested banning “anti-competitive” hospital contracting practices might help reduce healthcare costs nationwide.
However, Pipes advised that the narrative around medical debt can sometimes be exaggerated. While the Urban Institute’s survey indeed showed that more than one in four adults were in debt, she pointed out that this figure included many who were paying off their bills over time. Only 15.4% reported bills that were overdue or that they couldn’t afford, and almost half owed less than $1,000.
Medical debt appears to be particularly prevalent among adults aged 45 to 54, Black and Hispanic adults, and those earning between 100% to 200% of the federal poverty level. The survey also indicated that it’s more common among the uninsured, those with disabilities, or individuals in fair or poor health.
Michael Cannon from the Cato Institute acknowledged that while medical debt is concerning, it’s not as dire as some suggest. He noted that rising medical prices and unnecessary services fueled by government actions contribute to the issue, advocating for less intervention to lower both costs and the number of people facing large bills.
Furthermore, a fact sheet from the American Hospital Association highlighted that inadequate healthcare coverage is a primary cause of medical debt.
Brian Blase, president of the Paragon Health Institute, emphasized the financial strain large medical bills can create but argued that it’s crucial to differentiate between minor outstanding balances and substantial debts. Effective health insurance should ideally protect individuals against significant and unexpected medical costs, though high deductibles and out-of-pocket expenses can still lead to debt for insured individuals.
Blase pointed out that having medical bills doesn’t automatically indicate that these expenses led to bankruptcy, as financial distress often involves multiple debt types.
Recent polling has shown growing voter concern over rising healthcare costs, especially with the midterm elections approaching. An October 6 KFF poll revealed that a quarter of voters expressed significant worry about affording healthcare and gas.
The Urban Institute’s findings are based on their Well-Being and Basic Needs Survey (WBNS) from December 2025, which reflects data from over 10,000 U.S. adults.
