A study shows that most Americans have health insurance, but that doesn’t ease the fear of a medical emergency pushing them to the financial brink.
About 97% of 1,507 Americans surveyed in February by financial services firm JG Wentworth said they had health insurance. Still, 94.7% of the insured said they were still worried about hospital bills. On average, the $4,354 tab would be the financial breaking point for Americans. Seven in ten Americans said an unexpected medical bill of less than $10,000 would hinder their ability to cover essential expenses.
To put it in perspective, the average cost of just one night’s stay in the hospital in 2024 was $3,297, according to nonprofit health policy researcher KFF. The average stay in 2023 was 5.8 days, KFF said.
Medical debt is widespread, KFF said, with Americans owing a total of $220 billion. In JG Wentworth’s survey, 85.1% of respondents said they already had medical debt, with 81.3% owing between $1,000 and $10,000.
“Although health insurance is meant to reduce your medical costs, it does not eliminate them completely,” said a JG Wentworth spokesperson. “Even people with good insurance coverage can face thousands of dollars in deductibles and out-of-network fees from some providers. Insurance can limit the financial impacts of serious medical emergencies, but it doesn’t prevent a significant bill after a routine procedure.”
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A hospital visit can devastate household finances, according to a study by the Commonwealth Fund, which is why nearly one in four (23%) Americans are underinsured. Underinsurance means people face higher out-of-pocket costs even when they have insurance.
JG Wentworth’s survey shows some uncertainty, with only 12.4% of insured respondents feeling confident that their insurance would prevent financial hardship if a serious medical problem arose. 92 percent of people 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 gotten worse because they can’t afford their medication. Nearly 96% said they had to choose between essential items like medicine and food.
How long can medical debt burden you?
Only 6.7% of those JG Wentworth surveyed believe they can pay off their medical debt within a year. About 90% believe it will take one to three years to pay off.
Only a small group of 2.9% expect it to take more than three years, and 0.9% do not expect to ever repay it. According to a 2019 study published in the American Journal of Public Health, the No. 1 reason people file for bankruptcy is medical bills, accounting for about 67% per year.
How can people manage medical debt?
Experts say the best way to manage medical expenses is to plan.
“Know your deductible, out-of-pocket maximum and coinsurance rate before you need it,” said a JG Wentworth spokesperson. “Confirm that each 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 savings accessible to cover at least half of your out-of-pocket maximum at all times.”
HSAs got a boost from the tax and spending bill signed by President Donald Trump last summer. The bill opened up HSAs to millions of 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 advisors because contributions are tax-free, the money grows tax-free, and if used for qualified expenses, withdrawals are tax-free.
Also, double-check your medical bills by asking for a detailed statement. Look for errors or overcharges, which happen more often than you think.
This also happened to former US Surgeon General Jerome Adams, who posted a copy of his nearly $5,000 emergency room hospital bill after insurance paid his share. He told USA TODAY that the bill “surprised” him, and he began the process of disputing it.
Researching and disputing a medical bill can be difficult, but there are companies like GoodBill and Resolve that can help reduce your bill. They get paid by deduction from their savings.
Another option is to ask about financial aid programs before making a payment. “Many hospitals offer these but they are not always advertised,” said a JG Wentworth spokesperson.
Medora Lee is the money, markets and personal finance reporter at USA TODAY.