Medical Bankruptcies Statistics


While France has virtually no healthcare-related bankruptcies, about half a million Americans file for bankruptcy every year because of medical bills. These and many more medical bankruptcies statistics reveal the shocking effect of the soaring US healthcare costs.

While there are medical bankruptcies in Europe, Canada, and Australia as well, Americans still have it worse. Over 50% of Americans believe that they wouldn’t be able to deal with the costs of a major health issue. After all, the average medical bill for a hospital stay in the US costs $5,220 per day.

To learn more eye-opening facts and stats about medical bankruptcies by country and especially in the USA, keep reading. We will go beyond simple statistics and answer your most pressing questions too.

Medical Bankruptcies Statistics (Editor’s Choice)

  • One in every 10 Americans has outstanding medical debt. (Health System Tracker)
  • Every year, 530,000 American families file for bankruptcy due to medical bills. (Nasdaq)
  • US medical bills are a major reason behind filing for bankruptcy for 59% of Americans. (Investopedia)
  • On average, Americans spend about $10,000 a year on healthcare costs. (Debt)
  • 72% of all medical debt in the US comes from one-time medical issues. (Kaiser Family Foundation)
  • Most US citizens with medical debt owe between $1,000 and $2,500. (Kaiser Family Foundation)

Global Medical Bills Bankruptcy Statistics

1. Medical bankruptcies in Canada are the most common among senior citizens.

While about 4.6% of Americans filed for personal bankruptcy in 2007, the percentage in Canada was higher at 5.3%. A share of those insolvencies was caused by outstanding medical bills or other medical reasons. Fraser Institute concluded that senior Canadians of at least 55 years struggle with medical indebtedness the most. Namely, 15% named medical reasons as the primary cause of insolvency.

(Fraser Institute)

2. Medical bankruptcy exists in the United Kingdom, even with the single-payer system.

Even though the United States leads in medical bankruptcies around the world, other countries have them too. Medical bills bankruptcy statistics from 2005 show that 8.2% of those that went bankrupt in the UK listed illness or an accident as the reason. An article by the National Center for Public Policy Research further shows that medical-related bankruptcy doesn’t always happen due to medical bills — serious medical conditions often affect people’s ability to work and generate income.

(National Center)

3. In 2008, there were no medical-related insolvencies in France.

An article by Stanford Medicine compares the US medical bankruptcy statistics with those of France. Their research highlights that in 2007, 62% of all US insolvencies resulted from medical costs. By contrast, in France, there were no medical-related bankruptcies in 2008. The main reason is the single-payer system that ensures everyone gets free healthcare. Stanford Medicine, however, highlights that taxation in France is much heavier than in the USA.

(Stanford Medicine)

4. Less than 10% of personal insolvencies in Australia are due to medical reasons.

In the fiscal year 2016–2017, Australia saw a total of 25,225 personal insolvencies, according to medical bankruptcies statistics. Among those, about 1,830 resulted from health conditions. Meaning, only 7.25% of all personal insolvencies are related to medical issues and/or debt. The two main reasons for personal bankruptcy in Australia in 2016–2017 were excessive credit use (8,870) and unemployment or loss of income (8,035).


5. In Germany, medical reasons aren’t included in the top five reasons for personal bankruptcies.

While most personal insolvencies in the United States result from medical reasons, in Germany, the situation is different. A CRIF Bürgel study on German medical bankruptcies statistics shows that the main reason for bankruptcy is reduced work. Overspending, family changes, or separation are the other leading causes. Diseases are listed as the last common insolvency reason and mostly affect senior German citizens.

(CRIF Bürgel)

US Medical Debt and Bankruptcies

6. The total medical debt in the United States in 2021 was at least $48.6 billion.

A study by Credit Karma reveals that the total medical debt in the US was over $48 billion. This information was based on the credit reports of around 22.6 million Americans. The same medical debt statistics established that medical debt rose by 3.6 million from the moment the COVID pandemic started until August 2021, when the research was conducted.

(Credit Karma)

7. Every year about 530,000 families file for bankruptcy due to healthcare bills.

For hundreds of thousands of American households, filing for bankruptcy is easier than dealing with medical costs. According to a Nasdaq article, medical-related bankruptcies are killing the middle class in the USA. The author mentions other worrisome facts about medical debt, like a Nobel laureate who paid healthcare bills by selling his medal. It also stated that over 250,000 people seek help to pay medical bills through the GoFundMe crowdfunding service.


8. 59% of Americans file for bankruptcy because of medical bills.

People who file for bankruptcy are more likely to do it for several reasons. About 78% of people highlight the loss of income as the number one cause of bankruptcies in the US, while 59% of people cite medical costs as a major reason, medical bankruptcy statistics show. This number indicates that medical bankruptcies with insurance are a real problem in the USA.


9. Medical debt is the most common debt collection tradeline on credit records. 

Regarding the composition of collections tradelines or credit reports by type of creditor, 58% are associated with healthcare providers. The total medical debt in collections is estimated to be between $81 billion to $140 billion, while the median amount listed in bankruptcy petitions was $2,326.


10. 51% of all Americans think medical treatments cause more problems instead of solving them.

Medical debt statistics reveal that more than half of US citizens claimed that medical treatments create more problems due to their soaring costs. Meaning, even if the health issue is resolved, Americans are often left with huge bills and debt. About 48% said the value of medical treatments in the USA was worth it. In the same research, PRC established that 83% of the participants claimed that quality medical care was unaffordable.

(Pew Research Center)

11. Half of Americans worry that a major medical issue can lead to filing for bankruptcy.

About 50% of US citizens think they would go bankrupt if faced with a significant health issue, according to medical bankruptcies statistics. 15% of adult citizens also report that at least one person in their household currently has an outstanding medical debt, either partly paid or not paid at all. About 35% think lowering the cost of prescription drugs is the key to tackling the problem. 


12. In September 2022, healthcare was the most serious issue for about 2% of Americans.

Despite the soaring costs of medical treatment in the United States, healthcare isn’t the most serious issue among Americans. Only 2% highlighted healthcare as their biggest concern in September 2022. Compared to the other months, it’s notable that fewer and fewer people worry about healthcare. Facts about medical debt show that 4% highlighted this as the most serious issue in April 2022.

As for what worries Americans the most, 22% said the government and poor leadership, while 17% pointed out high living costs as their primary concern. About 12% of the Gallup survey participants said they worry about the economy in general.


13. About one-third of Americans struggle with medical debt and bills. 

The medical debt statistics from the Commonwealth Fund’s survey show that people who were affected by the pandemic were more likely to have medical bill problems: around 50% of those who caught COVID-19 or lost income due to the pandemic now struggle with medical debts. The survey further revealed that Hispanic (44%) and Black (55%) households were more likely to struggle with medical bills and lose income due to the pandemic than White (32%). 

(Commonwealth Fund)

14. Americans spend more than $10,000 on healthcare each year.

The average American medical bills per day are $5,220, and the average annual nursing home rates are about $97,450. These soaring expenses are the main reason why so many Americans file for medical-related bankruptcy. In 2021, healthcare spending in the US grew to $4.3 trillion. Hospital-related services accounted for more than 31% of these expenses, while pharmaceutical spending increased by 4.7%.

(Debt, Advisory)

15. Americans making under $40,000 a year struggle the most with medical debts.

This comes as no surprise, as people with the lowest spending power are those most affected by unexpected medical bills. Gallup’s medical bankruptcy statistics reveal that 28% of those who make less than $40,000 struggle with medical bills debt. Among Americans who earn between $40,000–99,999, only 12% reported difficulties paying healthcare bills.

Finally, only 6% of those who make $100,000 or more struggle with healthcare debt in the US. So, the situation here is opposite to the one with credit card balances. Namely, the latest credit card debt statistics show that those making the most money owe the most in this type of debt.


16. Medical bills bankruptcy statistics show that one-time events contribute to most medical bill problems among Americans.

A large percentage of bankruptcies due to medical bills result from one-time emergencies. About 72% said their medical debts came from a one-time or short-term medical expense. About 27% cited chronic illness as the reason behind their medical-related indebtedness, with diabetes and cancer the most common.

(Kaiser Family Foundation)

17. Most Americans struggle with medical bills for their own healthcare expenses.

Medical debt statistics show that among the people who couldn’t pay their healthcare expenses, more than half dealt with their own bills. While 54% had only their medical expenses to worry about, 34% dealt with both their and another person’s medical bills. Additionally, about 12% said their medical debts came from struggling with medical costs for somebody else.

(Kaiser Family Foundation)

18. Most Americans accrue debt from lab fees and diagnostic tests.

About 59% of participants in the KFF/NYT study said that diagnostic tests, such as X-rays or MRIs, and lab fees were responsible for their debt. Medical bankruptcies statistics also show that 56% claimed doctor visits represented the largest share of medical bills they couldn’t pay. The situation was similar with emergency care. Namely, 50% said they struggle to pay such medical bills, while 49% highlighted dental care as the largest share of problematic expenses.

Other notable mentions include hospitalization (35%), prescription drugs (30%), and outpatient surgeries (27%). The list goes on with ambulance services (20%), mental health services (20%), and pregnancy and childbirth (12%). Facts about medical debt show that nursing homes and long-term care are at the bottom, with only 8%.

(Kaiser Family Foundation)

19. The largest share of individual US medical debt was between $1,000 and $2,500.

About 22% of all participants with medical debts said the amount they owe falls within these thresholds. Around 18% and 20% owe $500–$1,000 and $2,500–$5,000 in medical bills, respectively. Healthcare indebtedness of over $5,000 was an issue for 12% of the participants, according to medical bankruptcies statistics. Finally, 16% said that their medical bills debt was below $500.

(Kaiser Family Foundation)

20. Getting healthcare from out-of-network providers is among the reasons for medical bankruptcy.

Namely, 69% of those who received care from out-of-network providers weren’t aware that the providers were out-of-network. Insurance companies always deny such claims later and refuse to cover the massive fees. This often leads to healthcare debt and even healthcare bankruptcies. Only 28% said they knew their healthcare providers were out-of-network.

(Kaiser Family Foundation/New York Times)

21. A collection agency contacted 47% of Americans with healthcare debt.

The latest medical bankruptcies statistics show that a collection agency has contacted almost half of US citizens due to medical or dental bills in the past five years. In addition, 35% claim the bills negatively affected their medical score, while 6% were sued by a medical provider, a collection agency, or a debt buyer. 

A collection agency contacted around 66% of Black citizens, representing the largest share across all ethnic groups. A bigger share of people with incomes lower than $40,000 was also contacted (55%), as well as 52% of women, compared to 41% of men.

(Kaiser Family Foundation)

22. 18% of those who had issues paying medical bills declared bankruptcy.

Among those, 2% declared bankruptcy in the past 12 months, and 16% declared bankruptcy more than 12 months ago. About 3% responded that medical bills were the primary reason for their bankruptcy. US medical bill bankruptcy statistics show that more insured (21%) than uninsured (14%) Americans declared bankruptcy.

(Kaiser Family Foundation/New York Times)

23. 47% of people with healthcare debt in the US didn’t know if their medical care provider offered fee reduction programs.

Medical debt relief programs can help people avoid medical bankruptcies in America. Still, almost half of people struggling with medical bills weren’t aware of them and whether hospitals offered them. Only 27% responded positively. Among those, only 15% decided to enroll or sign up for a hospital fee reduction program.

(Kaiser Family Foundation/New York Times)

US Medical Debt and Insolvency by Demographics

24. One in every 10 American adults owes significant medical debt.

Medical debt statistics from Kaiser Family Foundation’s analysis of government data revealed that 9% of US adults, or roughly 23 million people, owe medical debt more than $250 — despite the fact that over 90% of the nation has some form of insurance. 

The analysis further shows that people aged between 35–49 (11%) and 50–64 (12%) are more likely to build up medical debt than their younger and older counterparts. 15% of people living with disabilities reported having debts, and 21% of those with poor health.

(Health System Tracker)

25. More women than men struggle with medical debt in the US.

Out of all female adults, about 11% report struggling with medical debt. This compares to 8% for male adults. Some of this difference is attributed to costs that come with childbirth and the wage gap between the genders.

(Health System Tracker)

26. African Americans are more affected by healthcare debt than any other ethnic group.

The medical bankruptcies statistics from KFF’s analysis of a government survey established that 16% of African Americans struggled with medical debt. Hispanics and White Americans share the second spot, both at 9%, while 4% of Asian Americans reported having built up medical debt.

(Health System Tracker)

27. The South Census Region in the United States struggles the most with healthcare debt.

Stats on medical bankruptcies by state show that Southern states have it the worst, with 48% of participants saying they have medical debt. The next most affected region is the Midwest, with 41%. On the other hand, the Northeast and West have the lowest rates of people with medical debt in the US, at 35% each.

(Kaiser Family Foundation)

Frequently Asked Questions

Who is responsible for the medical bills of an 18-year-old?

Individuals aged 18 or older are the responsible party for their healthcare costs. Parents have a right under the Affordable Care Act to keep adult children up to 26 on their policy. Still, the reform doesn’t require them to be the responsible party for unpaid medical bills. 


When do medical bills go to collections?

Hospitals sell medical bills to collection agencies after a delinquency period of 90–180 days or more. Once placed in collections, you will receive a notification and an additional 180 days to pay them. Otherwise, you can expect medical bills on your credit report. 


What percentage of bankruptcies are caused by medical bills?

About 59% of bankruptcies among Americans are associated with medical bills. In addition to medical bills, which are insolvency factor number two, 78% of insolvencies are due to loss of income, while 45% of people cite mortgage debt as one of the main reasons. 


Is there interest on medical debt?

It depends on your contract. The Fair Debt Collection Practices Act (FDCPA) prevents collectors from charging interest rates and fees that weren’t included in the initial contract. If you agree to a repayment plan with your hospital, their policies will determine whether you pay interest or not.

Also, if you paid your debt off using your credit card or with a loan, both of these services include interest rates. 

(Debt, FTC)

What percentage of hospital bills go unpaid?

In 2020, about 95% of hospital bills in the United States were fully or partially unpaid. More than two-thirds of American patients can’t afford to pay for health treatment. This percentage isn’t expected to drop in the years ahead unless there’s a drastic change in the US healthcare system.

How do you get medical debt forgiven?

You must file a request with the healthcare provider if you want your debt forgiven. Only applications that provide proof of verifiable hardship are approved. A verifiable hardship is any disability that prevents you from working and generating income. Some charities and nonprofits like CancerCare may help as well.

How long until medical debt is forgiven?

Data shows that after seven years, your healthcare debt won’t appear on your credit report anymore. Still, you have to pay for it. The only way to have medical bills forgiven is to petition the healthcare provider by providing proof of your hardship.

What happens if you cannot pay medical bills?

Unless you agree to a payment plan with the hospital, your medical bills will probably be sold to a collector. Collecting agencies can take you to court and then seize your assets to get your money back. If you have a hardship, you may be eligible for medical bill forgiveness.

Not many people are familiar with medical debt relief programs, including free clinics, governmental benefits, state-sponsored programs, charities, and health care centers. Many of these provide assistance with medical bills debt for eligible Americans. So, before applying for a payday loan or generating credit card debt, check your eligibility with such programs.

Do medical bills have a statute of limitations?

Medical bills debt is just like all other types of debt and, therefore, the standard statute of limitations applies. This means it can be removed in between three and six years. Since each state has individual regulations, it’s vital to discover which ones apply to you.

Can I lose my home over medical bills?

Yes. If a hospital or a collector takes you to court and wins, they gain the right to seize your assets. There is another, more indirect route to losing your home. This happens when you are no longer able to cover mortgage payments because of medical bills.

Depending on where you live and how much you owe, your home may be in real danger. If you have no other assets, they will file a lien against it. Unless you cover your debt, you won’t be able to sell the estate without having the lien removed first.

The second scenario is more manageable since you can always sell the house and downsize. 

How do I protect my assets from medical debt?

There are several options here. First, you can secure a Health Savings Account Qualified (HSA) medical plan. Another option is to fund the tax-deductible HAS as much as the law allows it. A Long Term Care (LTC) policy shouldn’t be overlooked either. Finally, consider buying a critical illness product.

Another idea is to put money aside for health emergencies. Even though this is rarely a priority to healthy people, it pays off when something unexpected hits. After all, almost 48% of mortgage foreclosures in the USA are related to health and income.

Does medical debt affect credit score?

It depends. Medical debt isn’t one of the credit score factors unless the hospital turns it over to a collection agency. Collection agencies often report debts to credit bureaus, which negatively affects your rating. Beware that each collection on your report can lower your score by up to 100 points.


These medical bankruptcies statistics show that everyone should put money aside for health emergencies. Anyone who wants to avoid medical indebtedness and healthcare-related bankruptcies should ensure they can handle surprise medical bills. With the average medical bills in the US standing around $10,000, this figure should be your target for a rainy-day fund.

References: Fraser Institute, National Center, Stanford Medicine, AFSA, CRIF Bürgel, Credit Karma, Nasdaq, Investopedia, CFPB, Pew Research Center, Gallup, Gallup, Commonwealth Fund, Debt, Advisory, Kaiser Family Foundation, Kaiser Family Foundation/New York Times, Health System Tracker, KHN, Experian, Investopedia, Debt, FTC

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