Medical Debt in the South
About 17% of Southerners hold medical debt in default, compared to 11% of Americans outside the South.
Share of individuals with medical debt in collections, February 2022
Source: Urban Institute and Kaiser Family Foundation. Note: Universe is people with a credit bureau record. Debt in collections includes past-due credit lines that have been closed and charged-off on the creditor’s books as well as unpaid bills reported to the credit bureaus that the creditor is attempting to collect. South Dakota has adopted but not yet implemented Medicaid expansion.
Based on February 2022 credit bureau data, about 17% of Southerners had medical debt in collections compared to only 11% for non-Southerners. Most states in the deep South have failed to implement Medicaid expansion or were late to implement it, thus contributing to higher medical debt for their residents.1 In fact, 8 of the 10 states with the highest shares of residents with medical debt were Southern: West Virginia (24%), South Carolina (22%), North Carolina (20%), Louisiana (18%), Arkansas (18%), Tennessee (18%), Georgia (17%), and Kentucky (17%).
Medical debt often means families forgo medical care or make tough tradeoffs between paying for food, rent, or medical expenses, worsening both housing and food insecurity (Likelihood of Eviction or Foreclosure, Food Insecurity).2,3 Seven Southern states (AL, GA, FL, MS, NC, SC, and TN) can reduce medical debt levels by adopting Medicaid expansion. Southern states and localities can go further by paying off residents’ medical debt. The New Orleans City Council has set aside $1.3 million of its federal American Rescue Plan funds to erase $130 million in medical debt for New Orleans residents. The money would go to RIP Medical Debt, a national nonprofit that buys medical debt in collections and then forgives the debt.4
“Medical Debt in the US, 2009-2020”. Kluender, Mahoney, Wong, et al. JAMA Network. July, 2021. https://jamanetwork.com/journals/jama/fullarticle/2782187
“Health Care Debt in the U.S.: The Broad Consequences Of Medical And Dental Bills”. Lopes, Kearney, Montero, Hamel, and Brodie. Kaiser Family Foundation. June, 2022. https://www.kff.org/report-section/kff-health-care-debt-survey-main-findings/
“Upended: How Medical Debt Changed Their Lives”. Levey, Pattani. Kaiser Health News. August, 2022. https://khn.org/news/article/diagnosis-debt-investigation-faces-of-medical-debt/
“New Orleans plans to erase up to $130M in residents’ medical debt. When will it happen and who will be affected?” Winfrey. Verite News. December, 2022. https://veritenews.org/2022/12/29/new-orleans-plans-to-erase-up-to-130m-in-medical-debt/
