Unexpected Medical Bills

Twenty-eight percent (29%) of Maine respondents received an unexpected medical bill in the past year. Unexpected bills can be a major contributor to health care debt. A national survey found that many medical debts come from one-time or short-term medical expenses, which are often unexpected, and that many households don’t have the cash to cover an unexpected $500 health care bill.¹

Among respondents with unexpected bills, those with employer-sponsored and individually purchased insurance (e.g., through the health care Marketplace) most frequently reported unexpected medical bills (26% and 25%, respectively), followed by respondents enrolled in MaineCare, the state Medicaid program (21%) and Medicare (18%).

Financial Burdens Due to Medical Bills

Many survey respondents have experienced financial burdens due to medical bills. Over one-third (37%) reported experiencing one or more of these struggles to pay their medical bills in the last year:

• 16%—Were contacted by a collection agency
• 15%—Used up all or most of their savings
• 12%—Were unable to pay for basic necessities like food, heat or housing
• 10%—Accrued large amounts of credit card debt
• 9%—Borrowed money, got a loan or another mortgage on their home
• 9%—Were placed on a long-term payment plan
• 5%—Asked for donations (GoFundMe campaigns)

Notably, the survey results found that respondents ages 25-34 reported the highest rates of medical cost burdens (60%), followed by those age 35-44 (47%). Similarly, Respondents of Color reported experiencing at least one of the above medical cost burdens more frequently than white, non-Hispanic respondents. Likewise, respondents with a disability or who live with a person with a disability also reported navigating medical cost burdens more frequently than respondents without a disabled household member, and respondents with private insurance reported the highest rates of the above burdens due to medical bills (44%) compared to respondents with all other insurance types (see Table 1).

Medical Debt and Health Insurance

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.² Medical debt is largely driven by unaffordable bills, as 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.^3,4,5 This lack of affordability is reflected in national survey findings 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.⁶ These factors contribute to the rising amount of medical debt that many Americans face, which negatively impacts long-term financial security and ability to afford care in the future.

Medical debt is an issue for 341 survey respondents. More than a quarter (27%) of respondents reported that they or a family member had outstanding medical bills. Alongside outstanding bills, specific financial burdens related to medical debt included being contacted by a collection agency (16%); accruing large amounts of credit card debt (10%); borrowing money, getting a loan or another mortgage on their home (9%); and being placed on a long-term payment plan (9%).

Among those with outstanding medical bills, the most common amount of medical debt reported was $1,000-$2,499, reported by nearly a fifth (19%) of respondents. The next most frequently cited amounts were $2,500 – $4,999 (17%), less than $500 (16%), and $500 – $999 (13%). Still, more than 1 in 10 respondents (13%) report owing over $10,000 in medical debt. The duration of medical debts varied, with the largest share having a medical debt in their family for 1-2 years (30%) followed by less than one year (29%) and 3-5 years (24%).

Medical debt affects both insured and uninsured people (see Table 2). It can be common among uninsured people in part because they are responsible for the full cost of care.^7,8 However, those with employer-sponsored, individual, and marketplace insurance may also be exposed to medical debt through high cost-sharing.⁹ While Medicaid and Medicare enrollees often have low or no cost-sharing, they may have fewer covered services, such as dental care, or a lack of providers who will accept their insurance, requiring them to pay out-of-pocket.^{10, 11} All of these factors can contribute to medical debt across insurance types.

Nearly three fourths (72%) of respondents with medical debt had health insurance at the time they incurred the debt. At the time of the survey, just over half (36%) reported being covered by employer-sponsored insurance, MaineCare (21%), followed by Medicare (13%), insurance bought on the Marketplace exchange (8%). Nearly nine in every ten respondents (86%) reported having no gaps in coverage in the past 12 months.  

When asked why they incurred medical debt, over half (56%) of all respondents reported incurring medical debt because their insurance only covered a portion of the service and the remaining bill was too high, and nearly a fifth (19%) reported that their insurance did not cover the service at all. Notably, larger shares of those with MaineCare reported that it was because their insurance plan did not cover the service compared to other coverage types; in contrast, those with employer-sponsored or individually purchased insurance reported higher rates of incurring medical debt because their deductible was too high.

Respondents most frequently identified the following services as the source of their medical debt:

• 67%—Hospital
• 38%—Laboratory (lab tests, x-rays, scans)
• 34%—Doctor or technician in hospital
• 25%—Doctor or technician not in hospital
• 23%—Urgent care center
• 15%—Dentist or dental provider

In lesser numbers, respondents also indicated that they incurred their debt from a physical therapist or pain management clinic (11%), a mental healthcare or addiction treatment provider (11%), or from pregnancy-related expenses (8%). 

Differences in Amount and Reasons for Medical Debt

Medical debt affects consumers across incomes, age groups, and other demographic characteristics; however, there are differences in the prevalence of medical debt across groups, as well as the amounts and reasons for incurring medical debt.

Income

Respondents earning $75,001 – $100,000 reported the highest rates of medical debt by a small margin, followed by those earning $50,000 – $75,000 (see Table 3). While over half (57%) of respondents with household incomes of less than $50,000 per year report having $2,500 in medical debt or less, nearly a fifth (19%) owe more than $10,000 in medical debt.

Medical debt affects people across the income spectrum. While medical debt is most prevalent among low- and middle-income households, even high-income households are exposed to medical debt for similar reasons, including being unable to afford medical bills and expecting insurance to pay for services.¹²

There are some differences across income brackets related to why respondents accrued medical debt. Those earning less than $75,000 reported the highest rates of accruing medical debt because their plan only covered a portion of the service (61%). However, similar percentages (54%) of respondents earning $75,000 or more reported the same reason.

Age

Respondents of different ages reported different incidences of medical debt. Those ages 25-34 reported the highest rates of medical debt, followed by those ages 45-54 (see Table 4).

Nationally, rates of medical debt are higher among middle age and young adults, who are more frequently exposed to the combined high cost of care for themselves, children, spouses, and aging relatives.¹³ Studies have also found that large shares of non-elderly households cannot afford to pay typical cost-sharing amounts, especially those with low incomes.¹⁴ Medical debt impacts long-term financial security, with many adults delaying buying homes and education.¹⁵

Although the prevalence of health care debt can decline with age, one in five adults ages 65 and older still have medical debt nationwide, with roughly one-third taking money out of retirement, college, or other long-term savings accounts.¹⁶ In addition, adults of all ages have reported medical debt negatively impacting their credit scores.¹⁷ These conditions can make it more difficult for adults of all ages to afford needed care in the future.

This may be reflected in Maine respondents’ rates of worry about their ability to afford health care in the present and the future. Respondents ages 35-44 reported the highest rates of worry about not having enough money to pay for a major unexpected illness or injury (74%). In addition, respondents ages 35-44 reported the highest rates of worry about being able to afford maternity or reproductive care (60%).

Interestingly, worry about affording the cost of nursing home or home care services and medical costs when elderly was most frequently reported by younger respondents: 71% percent of respondents between the ages of 35-44 and 70% of respondents aged 25-34 reported being worried about affording medical care when elderly, and 70% of all respondents under the age of 65 reported being concerned about affording nursing home or home care costs now or in the future. This could suggest that Maine respondents may be worried about affording the cost of care for both themselves and aging relatives.

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 (36%) compared to those without a disabled household member (23%) (see Table 5). Respondents with a disabled household member most frequently reported owing $2,500 – $4,999 in medical debt (22%), while those without a disabled household member most frequently reported medical debt of $1,000 – $2,499 (22%).

While medical debt occurs across demographic groups, people with disabilities and health issues often report higher rates of medical debt.¹⁸ People with complex health needs require ongoing care and can incur high out-of-pocket costs as a result.¹⁹ They may also experience unemployment and income loss, further impacting their ability to afford medical bills.²⁰

Respondents with a disabled household member reported similar reasons for accruing medical debt. Fifty-seven percent of respondents without a disabled household member reported that they accrued medical debt because their plan only covered a portion of the service (57%) compared to fifty-four percent of those with a disabled household member (54%). Similarly, 17% of those without a household member with a disability had medical debt because their deductible was too high, compared to 9% of those with a household member with a disability (see Figure 1). Households with a member with disability also experienced higher rates of their coinsurance being too high (3%), compared to those without a household member with a disability (<1%).

Race and Ethnicity

Differences in medical debt exposure were also seen across racial/ethnic groups. White alone non-Hispanic respondents reported higher rates of medical debt (28%) compared to respondents of color (22%) (see Table 6).

Support for Solutions Across Party Lines

The burden of health care costs and the widespread support for solutions indicate that policymakers can prioritize addressing these consumer challenges. Maine respondents endorsed several strategies, including:

• 94% – Prevent hospitals from charging more for routine health care services that are most often provided in a doctor’s office.
• 93% — Rein in how quickly prescription drug prices can increase in the private health insurance market (Medicare and Medicaid already do this);
• 93% — Limit the price of expensive prescription drugs;
• 93% — Prohibit extra fees that aren’t connected to the cost of your care, like hospitals charging facility fees at offices and clinics miles away from the hospital campus;
• 92% – Limit the prices at expensive hospitals in the private health insurance market (Medicare and Medicaid already set hospital prices for their markets);
• 91% – Integrate the Medicaid and Medicare programs for people who are eligible for both to make it simpler for them to navigate those programs;
• 88% – Change the way we pay doctors and hospitals to reward quality outcomes rather than quantity of services;
• 88% – Make it easier for people to apply for and renew their Medicaid coverage; and
• 87% — Allow the government to limit and prevent health care mergers that could reduce competition and increase health care prices.

In addition, 84% of respondents thought that it was moderately or extremely important for the state to maintain or in some cases expand Medicaid funding to prevent medical debt and improve access to care for those who need it most. Support for solutions extended across the aisle, reflecting bipartisan agreement on the need for greater health care price transparency and policies designed to reduce the frequency of unexpected medical bills and out-of-pocket costs (see Table 7). It must be noted that, although price transparency tools can help identify unwarranted price variation, these tools alone do not make markets more efficient and generally fail to encourage consumers to shop for lower-priced services.²¹ Instead, policymakers may consider a combination of transparency tools and evidence-based policies to effectively address these issues.

Conclusion

Maine respondents report receiving unexpected medical bills that are often higher than anticipated. While some disputed their bills, many ended up paying them in full. In some cases, respondents experienced financial burdens to pay their medical bills, such as using up all their savings and going without other necessities. In other cases, respondents were unable to pay and had outstanding bills resulting in medical debt, or experienced other financial burdens due to medical bills such as credit card debt, loans, and bills going to collections. Respondents largely incurred medical debt due to unaffordable out-of-pocket costs. The majority had health insurance, and most reported incurring medical debt because their insurance plan did not cover the service, or because their deductible or co-insurance was too high and they could not afford to pay it.

Respondents across the political spectrum expressed support for policies to increase health care price transparency and curb excess prices that could lead to high out-of-pocket costs. However, while some system level changes can reduce prices and make them more transparent to consumers, if the resulting costs remain unaffordable for consumers, medical debt will continue to be an issue. Given the financial impacts of high medical bills and medical debt, state policymakers can use these insights to investigate policies that protect consumers from unaffordable out-of-pocket costs and prevent medical debt before it occurs. For more information on healthcare affordability in Maine and strategies that survey respondents support, please see the Maine Health Care Affordability Consumer Healthcare Experience State Survey.