Overview:
When this year’s Affordable Care Act open enrollment period ended on January 15, millions of Americans saw their out-of-pocket premiums balloon to unaffordable levels.
Even many Americans who get health insurance through their employers have seen their benefits change. All of this increases the likelihood of more people will juggle medical debt.
At the same time, Black Americans are twice as likely to struggle with medical debt, and are disproportionately more likely to face collection action for that debt, than whites.
As a result, experts say, medical debt is going to get worse — and the Black community will likely get hit hard by a financial crisis.
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Consumers, however, can arm themselves with tools that can help keep medical debt from ruining their household budgets, courtesy of two nonprofits focused on the issue.
The Side Effects of Medical Debt
Last week, the organizations Community Catalyst and the U.S. PIRG Education Fund unveiled a new consumer tool, Medical Bills: Everything you need to know about your rights.
As a result, “it’s important to learn how to handle your medical bills and avoid unnecessary billing charges. In some cases, you may even need to fight an illegal or incorrect medical bill.”
Even many Americans who get health insurance through their employers have seen their benefits change if their employers made changes to manage company costs. This usually means the employees will face higher out-of-pocket expenses and decreased coverage.
Abrupt increases like these worsen the crippling affordability crisis. Although the healthcare landscape has several pitfalls, consumers can arm themselves with tools that can help keep medical debt from ruining their household budgets.
One of those tools is an updated guide that this week millions of Americans have medical debt and face stringent debt collectors because of it. Recent data show nearly four in 10 people in the U.S. have medical debt.
Creditors Are Becoming More Assertive
Roughly 1% of U.S. workers were having their wages garnished by creditors in 2019 and the number of people being sued to collect medical debts has increased steadily since the end of the COVID pandemic.
Black adults are getting hit pretty hard and they carry a disproportionate amount of medical debt compared to whites. Research published last year found Black and Hispanic individuals were 52% more likely to have a debt collection judgment compared to white Americans. This was true despite the fact that Blacks and Hispanics typically had lower 90-day past due debt balances than “non-minority borrowers.”
“We find support that the judgment gap is partially driven by taste-based discrimination,” the research says. This means the decisions to sue debtors were based on the decider’s prejudice (or as economists would sa, their “taste”) that has little to do with the amount of the outstanding debt or the debtor’s income. “Furthermore, the disparity primarily affects non-delinquent borrowers, indicating higher levels of creditor discretion in initiating judgment proceedings” and they “disproportionately occur in predominantly Black neighborhoods, even after controlling for income differences across neighborhoods.”
Medical debt is also more common for women, particularly if they’ve recently had a child, and for people with disabilities.
“[We] hear every day from people struggling with confusing, inaccurate and unaffordable medical bills,” Michelle Sternthal, interim senior director of policy and strategy for Community Catalyst, said in a statement. The non-profit organization advocates for race equity and health justice.
Soaring medical costs “often means weighing food on the table against the care they need to live healthy, productive lives,” she said. The U.S. PIRG tool, she says, “gives people the knowledge to fight back as our organizations work to fix the systems that drive high costs and build the power of people and communities to protect themselves from unnecessary financial harm.”
The guide offers several ways consumers can protect their families, and their wallets, from burdensome medical debt. Here are some crucial points.
Understand your network. Even if you have the same health plan, you’ll want to make sure your favorite providers are in-network in 2026. If you have a new plan, you might need to spend some time finding new doctors that will let you take advantage of lower costs of in-network plans. For any appointments you’ve already scheduled for 2026, call those offices to check that they are in-network for your plan.
Check your medical transportation benefits. Be clear on what your co-pay and co-insurance are for ambulance rides. In addition, see if you have coverage for non-emergency transportation. With more hospitals closing their specialty units, more patients need transportation to get to a second hospital that offers cardiac, stroke or other specialty treatment. If it’s not urgent that you get to the second hospital, it’s considered “non-emergency.” Many people don’t realize their health insurance policy doesn’t cover those rides.
Request copies of your free credit report to fix any mistakes. The three major credit bureaus promised they won’t include several types of medical bills on Americans’ credit reports, including any new medical bills (less than a year old), any medical bills under $500, or any medical bills you’ve fully paid. In addition, several states have enacted prohibitions on credit reporting of medical debt. Report any errors if you see them. The guide gives you step-by-step instructions about how to check your credit report and dispute these mistakes or other inaccurate items.
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If you have any scheduled hospital care for 2026, check for your hospital’s financial assistance policy. With prices rising, many people will need help paying their medical bills. Take a moment to look up the application for your hospital’s financial assistance policy and gather the documents you need. Apply early.
Beware of medical credit cards and other untraditional payment options. These products often have high interest rates after the promotional period, so patients can end up paying much more than their original medical bill.
“It’s tempting to put off these simple steps, but staying on top of your health benefits could end up saving you hundreds or thousands of dollars,” said Patricia Kelmar, senior director of health care campaigns for U.S. PIRG Education Fund. “The medical billing system shouldn’t be and doesn’t need to be this complex. However, it is. We hear from so many people burdened with medical bills, so we recommend patients bookmark the online guide to keep handy for other billing rights information they might need.”