Background

In the absence of affordable care options, individuals may find themselves burdened by medical costs. In 2024, nearly 100 million Americans owed over $220 billion in medical debt.[i] Medical debt is largely driven by unaffordable bills: many Americans with private coverage must pay thousands of dollars in out-of-pocket expenses to get care, including increasingly high premiums, deductibles, co-insurance, and copayments.[ii]^,[iii],[iv] This lack of affordability is reflected in national survey findings showing that many medical debts stem from one-time or short-term medical expenses that are often unexpected,[v] and that roughly half of adults say they could not pay a $500 unexpected medical bill, and would either have to incur debt to pay it or would not be able to pay the bill at all.[vi] These factors negatively impact long-term financial security and ability to afford care in the future.

The aim of this brief is to present findings from the New Jersey CHESS survey on unexpected medical bills, financial burdens due to medical costs, medical debt, and support for policy solutions. Detailed information on the survey methods, sampling approach, and study population is provided in the Appendix.

Unexpected Medical Bills

Twenty-five percent (25%) of New Jersey respondents received an unexpected medical bill in the past year. Among respondents who received an unexpected bill, experiences varied by coverage. Respondents with individually purchased and employer-sponsored insurance (e.g., through the health care Marketplace) most frequently reported an unexpected medical bill (34% and 28%, respectively), followed by respondents enrolled in New Jersey FamilyCare, the state Medicaid program (22%) and Medicare (26%).

Financial Burdens Due to Medical Cost

Almost one-third of New Jersey respondents (28%) reported experiencing at least one financial burden due to medical costs in the last year.

Financial burdens were not evenly distributed across the population. Higher rates of medical cost-related burden were reported among younger adults, respondents of color, respondents with a disability or who live with a person with a disability, and respondents with Medicaid. The findings in New Jersey are consistent with what we see across the National CHESS data set regarding the impact of financial burdens from medical costs (Table 1).

Respondents reported a range of strategies and consequences when trying to manage medical expenses. Ten percent reported using up all or most of their savings, 9% reported being contacted by a collection agency, and 8% reported going without basic necessities like food, heat or housing due to medical bills. Fewer respondents reported borrowing money or taking out a loan or another mortgage on their home (8%), accumulating large amounts of credit card debt (7%), or being placed on a long-term payment plan (6%).

Medical Debt and Health Insurance

Twenty percent (20%) of New Jersey respondents reported that they or a family member currently have outstanding medical bills (Table 2). Among respondents with medical debt, the most commonly reported amount was less than $500 (23%), followed by $1,000 – $2,499 (22%), $500 – $999 (17%) and $2,500 – $4,999 (16%). Still, nearly 1 in 10 respondents (7%) report owing over $10,000 in medical debt.

Medical debt frequently occurred despite insurance coverage. Almost all respondents with medical debt (23%) reported having health insurance at the time they incurred the debt, and three in four respondents (86%) had no gaps in coverage in the past 12 months. At the time of the survey, just over half (52%) reported being covered by employer-sponsored insurance, followed by Medicare (12%), NJ FamilyCare (11%), and insurance bought on the Marketplace exchange (10%), Medical debt affects both insured and uninsured respondents (Table 2).

Respondents identified multiple reasons for incurring medical debt, reflecting differences in insurance coverage (Figure 1). One-third (12%) reported their deductible was too high to meet, and 2% reported that their coinsurance was too high. Notably, larger shares of those with NJ FamilyCare and Medicare reported their insurance plan did not cover the service, while employer-sponsored or individually purchased insurance more frequently reported high deductibles as the primary reason for debt.

Respondents most frequently identified hospital services (55%) and doctor or technician services in the hospital (34%) as the source of their medical debt. Other commonly reported sources included laboratory services (lab tests, x-rays, scans) (34%), doctor or technician services not in hospital (23%), and urgent care centers (15%). Smaller proportions cited physical therapy or pain management services (11%), dental care (10%), mental healthcare or addiction treatment (5%), and pregnancy-related expenses (4%) as the source of their medical debt. 

Differences in Amount and Reasons for Medical Debt

While insurance coverage plays a central role in how medical debt occurs, the prevalence and severity of medical debt also vary across income, age, disability status, and race and ethnicity.

Income

Medical debt was reported across income levels, though both the likelihood of having medical debt and the amounts owed varied by household income (Table 3). Among respondents with a household income below $50,0000, nearly one in five (17%) reported having $2,500 or less in medical debt, while nearly 1 in 10 (9%) owe more than $10,000. Notably, a higher proportion of respondents with household incomes below $75,000 per year report owing at least $10,000 in debt (10%) than respondents in any other income bracket.

Differences were also observed in the reasons respondents reported for incurring medical debt. While respondents across income groups cited similar reasons overall (Figure 2), middle-income respondents more frequently reported incurring medical debt because services were not covered by their insurance (24%), whereas respondents in higher income brackets more often cited high deductibles as a contributing factor (14%). Coinsurance was reported as a contributing factor across income groups.

Age

Medical debt prevalence varied by age (Table 4). Respondents ages 25-34 reported the highest rates of medical debt (28%), followed by those ages 35-44 (26%) and 18-24(19%). In contrast, those ages 65+ reported lower rates of medical debt (7%). Across all age groups, respondents most often reported lower amounts of medical debt, although a smaller share in each age group reported owing $10,000 or more.

Reasons for incurring medical debt were generally similar across age groups, though the relative importance of specific factors varied (Figure 3). Under half of respondents aged 18-24 (23%) reported incurring medical debt because their insurance plan didn’t cover the service(s) they received. Higher rates of medical debt due to high deductibles were reported among respondents ages 24-34 (19%), while respondents age 65 more frequently cited high coinsurance (5%).

Disability

Some of the highest rates of medical debt were seen among households that include a person with a disability. Respondents whose households included a member with a disability reported higher rates of medical debt for themselves or their family (31%) compared to those without a disabled household member (17%). Respondents with a disabled household member most frequently reported owing under $2,499 in medical debt (24%), while those without a disabled household member most frequently reported medical debt of less than $500 (29%).

Reasons for incurring medical debt were similar among respondents with or without a household member with a disability. Compared with respondents without a disabled household member, respondents with a disabled household member reported similar rates of medical debt due to non-covered services (17% vs 18%), high deductibles (10% vs 14%) and high coinsurance amounts (2% vs 2%) (Figure 4).   

Race and Ethnicity

Differences in medical debt exposure were also seen across racial/ethnic groups (Table 5). Respondents of color reported higher rates of medical debt (21%) compared to White alone non-Hispanic respondents (19%).

Support for Solutions Across Party Lines

Support for addressing medical debt extended across political affiliations, with respondents expressing strong support for policy approaches aimed at reducing out‑of‑pocket costs, increasing price transparency, and preventing unexpected medical bills (Table 7).

Taken together, these findings indicate that medical debt is widely viewed as a shared affordability challenge and that there is broad public support for policy efforts to prevent medical debt before it occurs.

Conclusion

Findings from the New Jersey Consumer Healthcare Experience State Survey show that unexpected medical bills, financial strain, and medical debt are common experiences for New Jersey residents. Many respondents reported significant financial burdens related to medical costs, including using savings, taking on credit card debt, or carrying unpaid medical bills.

Medical debt was most often driven by unaffordable out-of-pocket costs, even among respondents with health insurance. Many respondents incurred medical debt because their insurance plan did not cover the service, or because their deductible or co-insurance was too high to afford. Differences in exposure to medical debt were observed across income, age, disability status, and race and ethnicity, underscoring that medical debt affects a wide range of New Jersey households.

Respondents across the political spectrum expressed support for policies aimed at reducing out-of-pocket costs, increasing price transparency and preventing unexpected medical bills. Together, these findings highlight medical debt as a shared affordability challenge and point to broad public support for efforts to prevent medical debt before it occurs.

By grounding policy discussions in New Jersey residents’ lived experiences, these findings can help state policymakers identify and evaluate strategies that protect consumers from unaffordable out-of-pocket costs and prevent medical debt. For more information on healthcare affordability in New Jersey and strategies that survey respondents support, please see the New Jersey Health Care Affordability Consumer Healthcare Experience State Survey.