Black Americans had their unpaid medical debts placed with collection agencies at nearly double the rate of white and Hispanic borrowers between 2016 and 2022, according to a new analysis of credit report data from researchers at the University of California, Berkeley’s School of Public Health.
The study, published in May in Health Affairs Scholar, analyzed credit reports for roughly 23 million adults ages 18 to 64, offering one of the most granular looks yet at how medical debt in collections is distributed across racial and ethnic groups.
In 2022, 11.2% of non-Hispanic Black borrowers had new medical debt placed in collections during the prior year, down from 15.6% in 2016 but still well above every other group studied. Hispanic borrowers came in second at 6.5%, followed by non-Hispanic white borrowers at 5.9%. Asian and Pacific Islander borrowers had the lowest rate at 1.2%. The gaps were even wider on total outstanding balances: 24% of Black borrowers carried some amount of medical debt in collections in 2022, compared with 15.3% of Hispanic borrowers and 14.1% of white borrowers.
Notably, the disparities were driven far more by how many consumers had any debt in collections than by how much they owed. Among borrowers with new collection tradelines in 2022, average balances were tightly clustered, ranging from $1,513 for white borrowers to $1,647 for Hispanic borrowers.
Medicaid expansion mattered. States that expanded the program had lower medical debt levels across every racial and ethnic group and narrower gaps between them, particularly on newly accrued debt. But expansion did not eliminate the disparities, the researchers found.
The authors called the results a somber but expected reflection of well-documented differences in health and finances, noting that medical debt can feed a cycle in which debt worsens both health outcomes and financial stability. Lead author Alexander C. Adia said a bill that amounts to a rounding error for a health system can bankrupt an individual patient or force trade-offs against basic needs, even for the insured.
The study period ends in March 2022, just before the major credit bureaus stopped reporting paid medical debts and debts under $500, meaning the collections landscape has shifted since the data was collected. Still, the authors argue the underlying disparities warrant policy attention, and the paper suggests that interventions targeting medical debt directly, from credit reporting changes to charity care requirements, will keep drawing research and regulatory focus.
Overall medical debt in collections declined during the study period, with the share of all borrowers accruing new collection debt falling from 9% in 2016 to 6.3% in 2022.
