By Ryne Natzke

Medical debt continues to be one of America's most pressing public health crises. With an estimated $220 billion in medical debt affecting approximately one in 12 U.S. adults, the financial burden of healthcare costs has evolved into a significant social determinant of health (SDoH) in its own right.

This financial strain doesn't just impact patients' wallets — it may alter their care decisions and health trajectories. According to recent data, one in four adults say that in the past 12 months they have skipped or postponed getting health care they needed because of the cost. Notably, six in ten uninsured adults (61%) say they went without needed care because of the cost.
As the healthcare landscape evolves with new legislation and payment technologies, providers face both challenges and opportunities to address this critical intersection of financial wellness and health outcomes.

The evolving landscape of medical debt
While the fundamental relationship between medical debt and poor health outcomes hasn't changed dramatically in recent years, the legislative environment certainly has. New laws regarding how medical debt affects credit scores have created an unexpected dilemma for healthcare providers. Insurance companies have structured plans with substantial patient responsibility, but this has inadvertently incentivized some patients to deprioritize these payments since there are fewer consequences for non-payment.

This shift creates a challenging dynamic: providers depend more on patient payments for revenue while simultaneously facing diminished collection leverage. Compounding this challenge, state-specific regulations add another layer of complexity. For example, New York prohibits providers from requiring down payments for certain healthcare procedures and mandates disclosure when credit card payments convert medical debt to credit card debt — effectively waiving protections against credit reporting.

The price transparency imperative
One of the most promising approaches to addressing medical debt involves moving cost conversations earlier in the patient journey. While federal price transparency regulations require hospitals to post prices online, these tools can be complicated and difficult for the average consumer to use to understand what they owe. Even healthcare finance professionals may struggle to determine actual procedure costs using only the mandated price lists without additional tools or assistance. The No Surprises Act, along with a recent executive order issued by the White House in late February, aims to enhance the availability of clear, accurate, and actionable healthcare pricing information to support more informed decision-making.

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