Medical emergencies can lead to debt and bankruptcy — even for insured Americans

Even Americans who are covered by health insurance can emerge from medical emergencies with long-lasting financial scars.

In a study published this month in the journal Health Affairs, researchers found that 18 months after being hospitalized for a traumatic injury — such as a car accident or fall — the share of patients with medical debt in collections rose 5.2 percentage points, or a 24% relative increase, compared with before that medical emergency. Over that same period post-injury, the average balance in collections rose by $290, and 1 in 10 indebted patients owed more than $4,480.

Bankruptcy filings also increased by 3.2 per 1,000 patients — a 6% relative rise — about 15 months after injury, the researchers found.

“This work grew out of my clinical experience as a trauma surgeon and seeing acutely injured patients shouting at us to stop care because they’re worried about the bill,” said co-author Dr. John Scott, an associate professor of surgery at the University of Washington.

The researchers studied nearly 13,000 trauma patients’ credit reports from one year before to 18 months after they were hospitalized for an injury. Credit report data spanned 2018-2021. Nearly all the patients in the cohort — or 98% — had health insurance coverage.

“Insurance reduces the risk of financial catastrophe, but the way private plans are currently designed still leaves many people heavily exposed when something serious happens,” Scott said.

The study’s findings come at a time when health costs are a strain for many Americans, even among broader affordability worries. According to a recent poll by KFF, a nonpartisan health policy research group, two-thirds of Americans surveyed, or 66%, are worried about paying for health care — more than other household necessities such as utilities, food and groceries, housing and rent.

Legislators let the enhanced subsidies on the Affordable Care Act marketplace expire at the end of 2025, which is expected to create a surge of uninsured Americans and others with higher deductibles before their health coverage kicks in.

“If people are pushed into thinner coverage or out of coverage entirely, those numbers will only get worse,” Scott said of the financial impact of sustaining an injury.

While the ACA expanded health insurance coverage to millions of Americans, many private plans come with high deductibles that require people pay thousands of dollars before their insurance takes effect, Scott said. In 2026, the average marketplace deductible is $5,304 for a silver plan and $7,186 for a bronze plan, KFF found.

“An unexpected injury can mean thousands of dollars in out-of-pocket costs before insurance pays a dime,” Scott said.

Caitlin Donovan, senior director at the National Patient Advocate Foundation, said it was disturbing to see, in the study, “the utter failure of private insurance to protect people from debt and bankruptcy.”

“This study highlighted the need to build more protections into private insurance, either by limiting deductibles or even building in income-based limitations on out-of-pocket spending,” she said.

Trauma patients on Medicare and Medicaid saw different outcomes, with minimal changes in medical debt and bankruptcy later on, the researchers found. That was likely because Medicaid has minimal out-of-pocket costs, while expenses on Medicare are often capped, Scott said.

“If insurance is supposed to protect you from financial ruin after a health shock, Medicaid did its job,” Scott said. “Private insurance, for many people, did not.”