Medical Debt and Health Insurance: The CFPB Data That Connects the Two and the Plan Choices That Create the Problem
About 100 million Americans carry some form of medical debt, according to a KFF Health News investigation. The Consumer Financial Protection Bureau found $88 billion in medical bills on consumer credit reports in its 2022 analysis. The number that gets buried in the coverage of those statistics: a significant share of those people had health insurance when the bills were generated. They weren’t uninsured. They were enrolled in a plan that didn’t protect them from the costs they actually encountered, and in most cases, they made that enrollment decision themselves.
Who Carries Medical Debt
Medical debt isn’t concentrated at the bottom of the income ladder. A Third Way analysis of Census Bureau survey data found that middle-income Americans, roughly $50,000 to $100,000 a year, are the most likely to have unpaid medical bills, at 23.5%. Lower-income adults came in at 22% and higher-income adults at 13%. Lower-income households are more likely to qualify for Medicaid or charity care. Higher-income households have more financial buffer. Even among middle-income people with insurance, 22.5% carried medical debt. The core of the problem is working adults with employer coverage or marketplace plans who face cost-sharing they can’t meet when they actually need care.
Federal survey data points the same direction. In the National Health Interview Survey, privately insured adults in employer high-deductible plans were more likely to be in a family having problems paying medical bills than those in traditional plans, 15.4% versus 9.0%. They have coverage. That coverage just doesn’t protect them from the first several thousand dollars of annual costs, and when a significant health event occurs, that deductible comes due quickly.
The Path From Enrollment to Collections
The enrollment decision usually looks like this: three plan options, monthly premiums ranging from $150 to $420. The $270 difference between the cheapest and the most expensive option represents $3,240 per year, concrete and visible. The deductible difference, the coinsurance structure, the out-of-pocket maximum; those are abstract until they’re not. An employee who picks the $150 plan and then needs a specialist consult, a CT scan, and six weeks of physical therapy is facing $4,000 to $7,000 in cost-sharing before the plan begins contributing. That gap is where medical debt originates.
The Total-Cost Comparison Most People Never Run
The comparison that predicts real-world annual cost is total cost at multiple utilization levels, not premium comparison. At zero utilization (a genuinely healthy year) the cheapest plan wins. At moderate utilization, a handful of visits, one imaging study, ongoing prescriptions, the Silver or Gold plan often produces lower total cost because lower cost-sharing offsets the higher premium. At high utilization, a Gold plan’s lower deductible and out-of-pocket maximum frequently produce significant savings.
Research on how people choose plans shows how rarely this math gets done. Economists Jason Abaluck and Jonathan Gruber found that Medicare Part D enrollees consistently gave too little weight to out-of-pocket costs relative to premiums, and often picked plans that cost more while protecting less. A separate study of nearly 24,000 employees at one large company found that most chose plans that were financially worse than another option on the same menu, and lower-income workers were the most likely to do it. The researchers traced it to a basic lack of understanding of how health insurance works. People compare what they can see, and the premium is the easiest number to see.
What Changed With Medical Debt and Credit Reports
In 2022 and 2023, the three major credit reporting agencies (Equifax, Experian, and TransUnion) stopped reporting paid medical debt, stopped reporting medical debt less than a year old, and removed medical collections under $500 from credit reports. The CFPB went further in January 2025 with a final rule that would have barred medical debt from credit reports entirely, but a federal court vacated that rule in July 2025. The bureau changes still provide meaningful relief for people with smaller balances that were disproportionately impacting their credit scores. However, unpaid medical debt of $500 or more that is at least a year old can still appear on credit reports, with real consequences for borrowing costs, rental applications, and employment screening.
The OOP Maximum Is a Ceiling, Not a Guarantee
The federal out-of-pocket maximum for ACA-compliant plans in 2026 is $10,600 for an individual and $21,200 for a family. Once you hit that limit, the plan covers 100% of covered in-network costs for the rest of the year. But the OOP maximum is a ceiling within the plan’s covered benefits. Costs outside covered services, out-of-network costs not protected by the No Surprises Act, and the plan premiums paid throughout the year sit entirely outside that ceiling. For a household earning $55,000, hitting a $10,600 OOP maximum is still a financial crisis, just a bounded one.
Sources
KFF Health News. “100 Million People in America Are Saddled With Health Care Debt.” Diagnosis: Debt investigation with NPR and CBS News, 2022. https://kffhealthnews.org/diagnosis-debt/
Consumer Financial Protection Bureau. “CFPB Estimates $88 Billion in Medical Bills on Credit Reports.” March 1, 2022. https://www.consumerfinance.gov/about-us/newsroom/cfpb-estimates-88-billion-in-medical-bills-on-credit-reports/
Axios. “Medical debt is squeezing millions of middle-class Americans, report says” (Third Way analysis of Census SIPP data). August 21, 2023. https://www.axios.com/2023/08/21/medical-debt-middle-class
National Center for Health Statistics. “High-deductible Health Plans and Financial Barriers to Medical Care: Early Release of Estimates From the National Health Interview Survey, 2016.” June 2017. https://www.cdc.gov/nchs/data/nhis/earlyrelease/ERHDHP_Access_0617.pdf
Abaluck, J. and Gruber, J. “Heterogeneity in Choice Inconsistencies Among the Elderly: Evidence from Prescription Drug Plan Choice.” American Economic Review 101(3), 2011. https://dspace.mit.edu/handle/1721.1/73122
Bhargava, S., Loewenstein, G. and Sydnor, J. “Choose to Lose: Health Plan Choices from a Menu with Dominated Options.” Quarterly Journal of Economics, 2017 (NBER Working Paper 21160). https://www.nber.org/papers/w21160
Congressional Research Service. “An Overview of Medical Debt: Collection, Credit Reporting, and Related Policy Issues” (IF12169). https://www.congress.gov/crs_external_products/IF/PDF/IF12169/IF12169.5.pdf
Consumer Financial Protection Bureau. “CFPB Finalizes Rule to Remove Medical Bills from Credit Reports” (archived, with July 11, 2025 vacatur notice). https://www.consumerfinance.gov/archive/newsroom/cfpb-finalizes-rule-to-remove-medical-bills-from-credit-reports/
HealthInsurance.org. “Out-of-pocket maximum.” 2026 limits under the HHS Marketplace Integrity and Affordability final rule. https://www.healthinsurance.org/glossary/out-of-pocket-maximum-limit/
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