Unpaid Medical Bills

The states where people have the most unpaid medical bills

Income inequality in America is at its highest point in the last 50 years, according to recent data from the U.S. Census Bureau. Nearly a third of U.S. households have more credit card debt than they do emergency savings. But it’s not just overspending or inadequate incomes to blame. A recent survey from The Commonwealth Fund found that medical debt is a significant problem as well. Let’s take a look at the states where people have the most unpaid medical bills.

Unpaid medical bills by the numbers

More than 40% of working-age Americans (about 72 million people) either have medical bills that they can’t pay or are in the process of paying off, the survey found. That’s up from 34% in 2005. When you add in the 7 million elderly adults dealing with medical debt issues, the total rises to 79 million Americans who have medical bill or debt problems — nearly a quarter of the total American population.

And while the number of Americans who report having health insurance increased significantly from 2012 to 2015 (likely due to implementation of the Affordable Care Act in 2014), that number has leveled off the last couple of years.

Related article: What to do if you have medical debt you can’t pay

Medical debt and bankruptcy

The bottom line: Medical debt is a serious issue that sometimes causes people to declare bankruptcy. In fact, medical problems contributed to 66.5% of all bankruptcies, according to a study published in February as an editorial in the American Journal of Public Health. The findings indicate that 530,000 families suffer bankruptcies each year that are linked to illness or medical bills.

Understandably, most people want to avoid having medical bills send them into bankruptcy. In most cases, the sooner you deal with your medical debt, the better. That’s become somewhat easier in the last few years.

Related article: Here’s how to keep medical bills from sending you into bankruptcy

Medical debt and your credit score

For one, changes to the way medical debt is reported to the credit bureaus means your debt won’t show up on your report until it’s 180 days past-due and has been reported by a debt collector. That gives you time to work out a plan before it impacts your credit score. And many healthcare providers are willing to make a deal with you.

“Negotiating lower payoff amounts on medical debts is much the same as negotiating on other unsecured debts such as credit cards,” said Michael Bovee, a debt relief expert with more than 20 years of experience and the co-founder of Resolve. “Most of us will find the flexibilities we need after the bill went unpaid at least several months, or after it’s sent to an outside collection agency.

If you’re among those struggling to pay your medical bills, there are options beyond bankruptcy or even debt settlement, which can also impact your credit scores negatively for many years. Read here about how you can negotiate your medical bill payments.

Unfortunately, that doesn’t eliminate the ongoing issue of just how expensive medical care is in the United States. Where you live can make a big difference in how much you pay for care and what kind of insurance coverage is available to you.

According to the FINRA Financial Capability survey, health insurance coverage rates appear to be higher in states that have adopted Medicaid expansion, averaging 88% compared to 79% among the states that have not.

“On average, more than one in five Americans (23%) report having unpaid, past-due bills from a healthcare or medical service provider,” the survey concludes. “Among those without health insurance, the number rises to 33%. Younger respondents are more likely than older respondents to have unpaid medical bills. This is likely due to the lower incidence of health insurance among younger Americans and the ubiquity of Medicare among those 65 and older. Women are more likely than men to have medical debt, though they are not less likely to be insured.”

Unpaid medical bills, state by state

Here is a state-by-state look at the percentage of residents who are struggling with unpaid medical bills or past-due medical debt based on the FINRA survey findings, from the highest to lowest percentage:

Mississippi: 41%

South Carolina: 31%

West Virginia: 31%

Georgia: 30%

Alabama: 29%

Arizona: 29%

Texas: 29%

Delaware: 28%

Louisiana: 28%

Indiana: 27%

Kansas: 27%

Missouri: 27%

North Carolina: 27%

Oklahoma: 27%

Alaska: 26%

Kentucky: 26%

Maine: 26%

Montana: 26%

Tennessee: 26%

New Hampshire: 25%

South Dakota: 25%

Wyoming: 25%

Idaho: 24%

Ohio: 24%

Nevada: 23%

Vermont: 23%

Virginia: 23%

Wisconsin: 23%

Iowa: 22%

Florida: 21%

Nebraska: 21%

Pennsylvania: 21%

Colorado: 20%

Illinois: 20%

Michigan: 20%

North Dakota: 20%

Oregon: 20%

Utah: 20%

Maryland: 19%

Arkansas: 18%

New York: 18%

Washington: 18%

Minnesota: 17%

Rhode Island: 17%

Connecticut: 16%

Massachusetts: 16%

New Jersey: 16%

New Mexico: 15%

California: 14%

Hawaii: 13%

How Resolve can help

If you’ve fallen into significant debt and you don’t have the cash to pay off even a little extra toward your monthly minimum payments, you may be considering filing for bankruptcy or negotiating with your creditors for less than what you owe. Resolve is here to help. We can assess your situation and show you your options for paying off your debt, including filing bankruptcy, if appropriate. Our Resolve platform and debt guidance are free. You can review and compare debt relief paths and ask our experts questions without cost. If you then choose to work with one of our Resolve Network Partners, we would inform you of the fee for their service.  

While we currently do not offer partnerships with bankruptcy attorneys, we can connect you with licensed professionals in your state that offer a no-cost initial consult. We can also help you understand what bankruptcy would mean for your financial circumstances.

Your first step is to complete your profile here. We’re also happy to speak with you to discuss your situation further. Just send us a message.


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