Summary

Unexpected Medical Bills

Fifty-nine percent (59%) of Tennessee respondents received an unexpected medical bill in the past year. When asked about the nature of their bill, nearly half (48%) of respondents reported that the amount was higher than anticipated, and 36% reported that the bill was from a provider that they didn’t expect to receive a bill from. In smaller numbers, 20% reported being charged out-of-network rates by a provider they believed was in-network, 10% reported being charged for services they did not receive, and 14% reported experiencing something else unexpected.

Unexpected medical bills were most frequently reported as coming from a hospital (54%), doctor’s office (50%), and medical clinic (24%), followed by pharmacies (21%), ambulance services (10%), and pregnancy-related services (4%). 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 (51% and 50%, respectively), followed by respondents enrolled in TennCare, the state Medicaid program (46%) and Medicare (33%).

Respondents made various attempts to resolve their unexpected medical bills, with nearly half (46%) taking more than one step. Many contacted their health plan (46%) or provider (44%), and some attempted to challenge the bill or negotiate a lower bill (11%), while others paid the bill without disputing it (13%). Few filed an insurance appeal (9%) or formal complaint (4%) (see Table 1).

Just 52% of respondents with an unexpected medical bill indicated that the issue was resolved to their satisfaction (see Table 2). Notably, respondents who were satisfied with their bill resolution more frequently took more than one step to resolve their bill, such as contacting their health plan, whereas respondents who were dissatisfied with the resolution had higher rates of paying the original bill without disputing and taking no additional steps.

Regardless, most respondents reported that they settled their bills by paying in full (36%) or through a payment plan (22%), while a smaller number successfully negotiated a lower bill (10%) or had their bill dismissed (10%) (see Table 3). Some respondents (8%) were contacted by a collection agency, while few (<1%) filed for bankruptcy.

Financial Burdens Due to Medical Bills

Many survey respondents have experienced financial burdens due to medical bills. Over two-fifths(45%) reported experiencing one or more of these struggles to pay their medical bills in the last year:

• 16%—Used up all or most of their savings
• 16%—Were contacted by a collection agency
• 15%—Were unable to pay for basic necessities like food, heat or housing
• 11%—Borrowed money, got a loan or another mortgage on their home
• 9%—Racked up large amounts of credit card debt
• 9%—Were placed on a long-term payment plan
• 7%—Asked for donations (GoFundMe campaigns)

Notably, the survey results found that respondents ages 25-34 reported the highest rates of medical cost burdens (61%), followed by those age 18-24 (60%). 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 insurance coverage purchased independently reported the highest rates of the above burdens due to medical bills (57%) compared to respondents with all other insurance types (see Table 4).

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: 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 Tennessee survey respondents as well: over 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%), borrowing money, getting a loan or another mortgage on their home (11%), racking up large amounts of credit card debt (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  less than $500, reported by fifty-seven percent of respondents. The next most frequently cited amounts were $1,000 – $2,999 (12%), $500 – $999 (10%) and $2,500 – $4,499 (9%). The duration of medical debts varied, with the largest share having a medical debt in their family for [less than a year] (67%) followed by 1-2 years (18%) and 3-5years (9%). The majority of respondents had never been given an opportunity to have their medical debt relieved (52%) or erased (52%).

Medical debt affects both insured and uninsured people (see Table 5). Medical debt can be common among uninsured people in part because they are responsible for the full cost of care.^7,8 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.

Almost all (67%) of those with medical debt had health insurance at the time they incurred the debt. At the time of the survey, 36% reported being covered by employer-sponsored insurance, followed by Medicare (26%), insurance bought on the Marketplace exchange (15%), and TennCare (10%). Three in four respondents (76%) had no gaps in coverage in the past 12 months.  

When asked why they incurred medical debt, two out of five (39%) of all respondents reported incurring medical debt because their insurance only covered a portion of the service, and the remaining bill was too high, followed by their insurance not covering the service at all (17%). A smaller number of respondents reported that their deductible was too high, and they were unable to meet it (8%), while 3% reported that their coinsurance was too high. Notably, larger shares of those with TennCare and Medicare 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 (see Figure 1).

Of those respondents reporting current medical debt they most frequently identified the following services as the source:

• 63%—Hospital
• 33%—Doctor or technician in hospital
• 24%—Doctor or technician not in hospital
• 26%—Laboratory (lab tests, x-rays, scans)
• 16%—Urgent care center

In lesser numbers, people selected dentist or dental provider (11%), pregnancy-related expenses (6%), physical therapist or pain management clinic (9%) and mental healthcare or addiction treatment (5%) as the source of their medical debt. 

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 (see Table 6), as well as the amounts and reasons for incurring medical debt.

Income

Those earning $50,001-$75,000 reported the highest rates of medical debt, followed by those earning less than $50,000 (see Table 6). Eighteen percent of respondents with household incomes of less than $50,000 per year report having $2,500 in medical debt or more, and roughly five percent 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 $75,001- $99,999 reported the highest rates of accruing medical debt because their plan did not cover the service (21%). However, similar percentages of respondents from all other income brackets reported the same reason (see Figure 2).

Those earning over $100,000 reported the highest rates of accruing debt because their deductible was too high (40%), although similar percentages of those earning between $50,000 – $75,000 (35%) and between $75,001 – $99,999 (36%) reported the same. Still, almost a quarter (22%) of those earning below $50,000 reported their deductible being too high was a cause of their medical debt. High coinsurance also seemed to be a common reason for medical debt accrual across all income levels, though slightly less so for those earning $100,000 or more.

Age

Respondents of different ages reported different incidence of medical debt. Those ages 35-44 reported the highest rates of medical debt, followed by those ages 18-24 (see Table 7). Respondents ages 65+ most commonly reported owing less than $500 in medical debt (86%), followed by those ages 55-64 (73%) and ages 45-54 (60%). Respondents age 35-44 most commonly report having $10,000 or more in medical debt (7%), compared to those age 45-54 (6%) and 25-34 (5%) respondents.

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 Tennessee 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 (70%). In addition, respondents ages 18-24 reported the highest rates of worry about being able to afford maternity or reproductive care (47%).

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: 70% percent of respondents between the ages of 35-44 and 65% of respondents aged 45-54 reported being worried about affording medical care when elderly, and 68% of all respondents under the age of 65 reported being concerned about affording nursing home or home care costs. This could suggest that Tennessee respondents may be worried about affording the cost of care for both themselves and aging relatives.

Across age groups, respondents report [similar reasons for accruing medical debt. Roughly half of respondents ages 35-44 (21%) and 45-54 (19%) report accruing medical debt because their insurance plan didn’t cover the service(s) they received (see Figure 3). Respondents age 18-24 reported higher rates of accruing medical debt because their deductible was too high (14%) compared to other age groups, and reported higher rates of accruing medical debt because their insurance only covered part of the service and the remainder of the bill was too high (55%).        

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 (35%) compared to those without a disabled household member (23%) (see Table 8). Respondents with a disabled household member most reported owing more than $5,000 in medical debt (22%), compared to those without a disabled household member (8%).

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. Eighteen percent (18%) of respondents with a disabled household member reported that they accrued medical debt because their plan didn’t cover the service compared to seventeen percent (17%) of those without a disabled household member. Similarly, those with a household member with a disability had medical debt because their insurance only covered part of the cost of the service and the remainder was too high (46%) ), over those with households without a member with a disability (see Figure 4).

Race and Ethnicity

Differences in medical debt exposure were also seen across racial/ethnic groups. Respondents of color reported higher rates of medical debt (34%) compared to White alone non-Hispanic respondents (24%) (see Table 9) Respondents of Color most commonly report owing less than $2,500 in medical debt (63%), followed by Black/African American respondents (53%) and white alone non-Hispanic respondents (52%). White alone non-Hispanic respondents most commonly report having $7,500 or more in medical debt (at 17%), compared to Black/African American (11%) respondents.

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. Tennessee respondents endorsed several strategies, including:

• 93%—Show what a fair price would be for specific procedures;
• 92%—Require insurers to provide up-front cost estimates to consumers;
• 91%—Require hospitals and doctors to provide up-front cost estimates to consumers;
• 89%—Establish standard payments to hospitals for specific procedures;
• 90%—Expand health insurance options so that everyone can afford quality coverage

In addition, 83% of respondents thought that it was moderately or extremely important for the state to maintain 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 10).

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.

For more information on the types of strategies Tennessee residents support, see: Tennessee Residents Struggle to Afford High Health Care Costs; Worry about Affording Health Care in the Future; Support Government Action across Party Lines, Healthcare Value Hub, Data Brief (September 2025).  

Conclusion

Tennessee 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 Tennessee and strategies that survey respondents support, please see the [Tennessee Health Care Affordability Consumer Healthcare Experience State Survey].