Most Americans have health insurance, but that doesn’t ease fears of a medical emergency pushing them to the financial brink, a study shows.
Nearly 97% of the 1,507 Americans surveyed in February by financial services firm JG Wentworth said they had health insurance. Still, a whopping 94.7% of the insured said they still worry about hospital bills. On average, a $4,354 tab would be the financial breaking point for Americans. Seven in ten Americans said an unexpected medical bill under $10,000 would hamper their ability to cover essential expenses.
To put that in perspective, the average cost to stay just one night in a hospital was $3,297 in 2024, according to nonprofit health policy researcher KFF. The average stay was 5.8 days in 2023, KFF said.
Medical debt is widespread, with Americans owing $220 billion in total, KFF said. In JG Wentworth’s poll, 85.1% of respondents said they already had medical debt, with 81.3% owing between $1,000 and $10,000.
“While health insurance is in place to reduce your medical costs, it doesn’t eliminate them entirely,” a JG Wentworth spokesperson said. “Even people with good insurance coverage can face deductibles adding up to thousands of dollars and surprise out-of-network charges from some providers. Insurance can limit the financial impacts of serious medical emergencies, but it doesn’t prevent a significant bill from arriving after a routine procedure.”
The Insurance Gap
A reason one hospital visit can devastate household finances is that nearly one in four (23%) Americans are underinsured, according to a study by The Commonwealth Fund. Underinsured means people are exposed to high out-of-pocket costs despite having insurance.
JG Wentworth’s survey reflects some of that uncertainty, with only 12.4% of insured respondents feeling very confident that their insurance would prevent financial hardship if a serious medical issue arose. Ninety-two percent had even delayed or avoided medical care because of cost concerns.
Among respondents with long-term conditions, nearly one in three (31.8%) said their condition has worsened because they could not afford their medication. Almost 96% said they had to choose between medication and essentials such as food.
How Long Can Medical Debt Saddle You?
Only 6.7% of those JG Wentworth surveyed believe they can clear their medical debt within a year. Almost 90% believe it will take one to three years to pay off.
A small group of just 2.9% expect it to take more than three years, and 0.9% never expect to repay it at all. Medical bills are the No. 1 reason people file for bankruptcy, accounting for nearly 67% of them a year, according to a 2019 study published in the American Journal of Public Health.
How Can People Manage Medical Debt?
The best way to manage medical expenses is to plan, experts said.
“Know your deductible, out-of-pocket maximum and coinsurance rate before you need them,” the JG Wentworth spokesperson said. “Confirm every provider is in-network before elective procedures. If you’re on a high-deductible plan, consider paying into a Health Savings Account (HSA). Contributions are tax-advantaged, and the balance carries over indefinitely. Keep accessible savings to cover at least half of your out-of-pocket maximum at all times.”
HSAs got a boost in President Donald Trump’s signature tax and spending bill last summer. The bill opened up HSAs to tens of millions more Americans by allowing more Affordable Care Act insurance plans, Direct Primary Care arrangements, and plans with telehealth coverage. HSA plans are a favorite savings vehicle among financial advisers because contributions are tax-free, money grows tax-free, and if used for a qualifying expense, withdrawals are tax-free.
Also, double-check your medical bills by asking for an itemized statement. Look for errors or overcharges, which happen more often than you may think.
It even happened to former U.S. Surgeon General Jerome Adams, who posted a copy of his nearly $5,000 emergency room hospital bill after insurance paid its portion. The bill left him “flabbergasted,” he told USA TODAY, and he started the process to dispute it.
Researching and disputing a medical bill can be arduous, but there are companies like Goodbill and Resolve that can help get your bill lowered. They get paid by taking a cut of the savings.
Another option is to ask about financial assistance programs before paying. “Many hospitals offer these but they are not always advertised,” the JG Wentworth spokesperson said.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY.
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