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Medical Debt in the US: A Complex Issue Affecting Millions

Strategic Insights

— 2 min read

Medical debt is a prevalent problem for Americans, with $88 billion in outstanding medical debt on consumer credit reports as of June 2021, according to the Consumer Financial Protection Bureau (CFPB). Uninsured, Black, and Hispanic Americans are disproportionately affected, with 19% of people reporting having medical bills they could not fully repay in 2017. The need for medical care can be unexpected and not discretionary, making it difficult for consumers to manage their debt.

Key Takeaways:

  • Medical debt is a common occurrence for Americans, with $88 billion in outstanding debt on consumer credit reports as of June 2021.
  • Uninsured, Black, and Hispanic Americans are more likely to have medical debt, with 19% of people reporting having medical bills they could not fully repay in 2017.
  • Medical debt is often reported to credit bureaus voluntarily, and not all debts are reported.
  • The Fair Credit Reporting Act (FCRA) imposes certain responsibilities on those who collect, furnish, and use consumers' credit reports.
  • The CFPB has taken steps to address medical debt, including a finalized rule that would have removed medical debt from credit reports and prohibited lenders from making underwriting decisions based on medical debt.
  • However, the rule was challenged by a lawsuit and eventually vacated by a judge in July 2025.
  • Opponents of the rule argued that it could have had unintended negative consequences on consumers, including higher likelihood of costly litigation and decreased access to credit.
  • The CFPB estimated that the rule would have erased $49 billion in outstanding medical bills from credit reports and scores for 15 million Americans.

Statistics:

  • $88 billion: Outstanding medical debt on consumer credit reports as of June 2021 (Source: CFPB).
  • 19%: People reporting having medical bills they could not fully repay in 2017 (Source: Census Bureau survey).
  • 58%: Medical debts reported in collection as a percentage of total debts reported in 2021 (Source: CFPB).
  • $7 billion: Amount of medical debt cancelled by state and local governments using funds from the American Rescue Plan Act of 2021 (Source: various state and local governments).
  • $24 billion: Estimated loss of revenue for medical providers in the first year following the CFPB's proposed rule (Source: ACA International report).
  • 20 points: Average increase in credit scores for consumers with medical debt following the CFPB's proposed rule (Source: CFPB).
  • 15%: Percentage of debt collection complaints related to medical debt collection in 2021 (Source: CFPB).
  • 11: Number of states that have enacted laws restricting or banning medical debt credit reporting as of June 2025 (Source: various state governments).

Sources:

  • Congressional Research Service, "An Overview of Medical Debt: Collection, Credit Reporting, and Related Policy Issues" (IF12169, August 29, 2025).
  • Consumer Financial Protection Bureau, "Medical Debt on Credit Reports" (2021).
  • Census Bureau, "Survey of Income and Program Participation" (2017).
  • IBISWorld, "Debt Collection Industry" (2025 Industry Revenue Estimate).
  • American Rescue Plan Act of 2021 (P.L. 117-2).
  • No Surprises Act, Consolidated Appropriations Act, 2021 (P.L. 116-260).
  • Fair Debt Collection Practices Act (FDCPA, 15 U.S.C. Sec.Sec.1692-1692p).
  • Fair Credit Reporting Act (FCRA, 15 U.S.C. Sec.1681).
  • Cornerstone Credit Union League and the Consumer Data Industry Association v. Consumer Financial Protection Bureau (2025).
  • S.J.Res. 36 and H.J.Res. 74 (2025).
  • S. 2483, S. 4289, H.Res. 532, H.R. 9129, H.R. 1773, H.R. 5180, H.R. 6003/S. 3103, and H.R. 7515 (2025).

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