Medical injuries followed by debt and bankruptcy even for the insured
Even with health insurance, a serious medical emergency can leave Americans facing significant financial hardship. A new study reveals the lasting economic impact of traumatic injuries, demonstrating how quickly medical debt can accumulate and even lead to bankruptcy.
Financial Fallout From Injury
Researchers analyzing credit reports from nearly 13,000 trauma patients between 2018 and 2021 found a concerning trend. Eighteen months after hospitalization for a traumatic injury – such as a car accident or fall – the percentage of patients with medical debt in collections increased by 5.2 percentage points, a 24% relative increase compared to their pre-injury status. The average balance in collections rose by $290, and 1 in 10 patients found themselves owing more than $4,480.
The study also indicated a rise in bankruptcy filings. Approximately 15 months after injury, filings increased by 3.2 per 1,000 patients – a 6% relative increase.
The Burden of High Deductibles
The financial strain is often triggered by high deductibles common in many private insurance plans. In 2026, the average deductible for a silver plan is $5,304, and for a bronze plan, it’s $7,186. This means individuals can face thousands of dollars in out-of-pocket expenses before their insurance coverage begins to pay.
Dr. John Scott, an associate professor of surgery at the University of Washington and co-author of the study, noted that he was driven to investigate this issue after witnessing patients “shouting at us to stop care because they’re worried about the bill.” Caitlin Donovan, senior director at the National Patient Advocate Foundation, described the findings as revealing “the utter failure of private insurance to protect people from debt and bankruptcy.”
Differing Outcomes Based on Insurance Type
The study revealed a stark contrast in financial outcomes between patients with different types of insurance. Those covered by Medicare and Medicaid experienced minimal changes in medical debt and bankruptcy rates following a traumatic injury. Researchers attribute this to the limited out-of-pocket costs associated with Medicaid and the capped expenses within Medicare.
What Could Happen Next
With the expiration of enhanced Affordable Care Act (ACA) subsidies at the end of 2025, more Americans may find themselves with less comprehensive coverage or higher deductibles. This could exacerbate the financial risks associated with medical emergencies, potentially leading to even greater increases in medical debt and bankruptcy filings. If individuals are pushed into “thinner coverage or out of coverage entirely,” Dr. Scott predicts that the financial impact of sustaining an injury will only worsen.
Frequently Asked Questions
What did the study measure?
The study measured changes in medical debt in collections and bankruptcy filings among nearly 13,000 trauma patients from one year before to 18 months after hospitalization for an injury, using credit report data from 2018-2021.
What percentage of patients in the study had health insurance?
Nearly all of the patients in the study – 98% – had health insurance coverage.
How did outcomes differ for patients on Medicare and Medicaid?
Trauma patients on Medicare and Medicaid saw minimal changes in medical debt and bankruptcy rates, likely due to limited out-of-pocket costs with Medicaid and capped expenses with Medicare.
As healthcare costs continue to rise, how can individuals better prepare for the potential financial consequences of a medical emergency?