Health care has become the largest source of debt in collections in the U.S.
The volume of medical debt lawsuits in the civil legal system is staggering—and on the rise. The widespread impact of medical debt has been magnified by the COVID-19 pandemic. The Medical Debt Policy Scorecard ranks all 50 states’ medical debt consumer protection policies to make transparent and actionable the varying landscape of consumer medical debt protections nationwide.
States by Rankings
From top scoring to lowest scoring
Highlights
States can address the medical debt crisis by adopting robust policies that prevent medical debt, help consumers avoid court involvement, and ensure that court-involved cases do not result in devastating consequences for the patient.
Approximately 1 in 5 Americans have medical debt on their credit report. Debt collection lawsuits are the most common type of civil litigation and medical debt comprises the majority of debt collection lawsuits in many jurisdictions. The majority of medical debt collection lawsuits end in default judgments against people experiencing medical debt. Medical debt and medical debt judgments wreak havoc across all aspects of life, including employment, physical health, mental wellbeing, housing, and economic stability.
Policies that increase access to adequate levels of health insurance, financial assistance policies, and Medicaid help prevent medical debt because they intervene upstream, before debt is incurred. While prevention is the ultimate goal, policies are still needed to help patients who have incurred medical debt to problem-solve with providers and keep medical debt out of court. This can be achieved through policies that prevent sending bills to collections, prevent medical debt from being reported to credit bureaus, and require providers to establish and notify patients of procedures for resolving billing disputes. Finally, for cases that proceed to court, states should be aware that most patients are self-represented in a court system made by lawyers for lawyers. Patients experiencing medical debt who are navigating the civil legal system would benefit from policies that limit the timeframe in which medical debt can be litigated and limit post-judgment collection such as wage garnishment and home foreclosure. The cost of medical debt litigation and post-judgment collection adds to the financial distress that led to the medical debt in the first place.
This first of its kind Medical Debt Policy Scorecard ranks states based on current policies that reduce the instances of medical debt and effectively assist people experiencing medical debt. For a full list of policies included in this scorecard and recommendations for policy change, see the Methods and Discussion sections of the Scorecard report by visiting the Methodology page on this site. The study period for the 50-state Medical Debt Policy Scorecard occurred between August 2021 and December 2021.